2020 was supposed to be a dream year for everyone but an unexpected pandemic has changed the whole picture. All predictions and assumptions by experts about 2020 fell down. During this pandemic, people had adopted the online trend. In real estate also there was a quite good response for the online things. Example:- Instead of doing direct property visitation, we have adopted online property visits on video calls or 360-degree views of the property.
Let’s have a quick overview of both sides of the coin, i.e the ups, and downs of Indian real estate during 2020.
Because of the nationwide lockdown, most businesses changed their real estate decisions. As compared to the Q1 of 2019 report, in this year’s Q1 demand for office spaces is reduced by 30%. But as we are going in 2021, we can see the increasing demand for office spaces so we can hope for a good response from the business in the new year.
Also for construction activities, lots of decisions were delayed for approval from the government. So the new completions were recorded at 8.6 mn sq ft in the first quarter of 2020, a 40% drop as compared to the same period last year.
Residential sales volume across major cities(Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, and Kolkata) in India jumped by 2.5x from July 2020 to September 2020, compared with the previous quarter, We can say healthy recovery after the strict lockdown imposed in the second quarter due to the spread of COVID-19 in the country.
Major investments and developments in 2020
- Brookfield Asset Management will buy 12.5 million square feet of commercial real estate assets from privately held developer RMZ Corp. The purchase includes rent-yielding office space and commercial co-working space.
- Puravankara Ltd, a realty firm, plans to invest around Rs. 850 crore (US$ 121.6 million) over the next four years to develop three ultra-luxury residential projects in Bengaluru, Chennai, and Mumbai.
- Hiranandani group to invest ₹15,000 crores to develop data centre parks. Also in Bangalore, Godrej properties have invested in 18 acres of land(Whitefield) with 2.4 million square feet saleable area.
- According to Anarock, India will have 100 new malls by 2022 out of these 100 numbers, 69 malls will be built in the top seven metropolises and the remaining 31 malls will be in Tier 2 & 3 cities.
Government Initiatives in 2020
- The Ministry of Housing and Urban Affairs (MoHUA) launched an affordable rental housing complex portal.
- Pradhan Mantri Awas Yojana (Urban) (PMAY (U)), 1.12 crore houses have been sanctioned in urban areas, creating 1.20 crore jobs.
- The government has also released draft guidelines for investment by Real Estate Investment Trusts (REITs) in the non-residential segment.
During this pandemic, because of the loss of jobs and migration of people, house owners lost their rental income. This resulted in a negative impact on property owners. Investors were thinking twice about investing in rental properties. But at the same time, lots of builders were giving offers and discounts for selling their inventories. Instead of going to a rental house, owning their own house was being preferred. Read our latest blog on why is buying a house better than renting after the pandemic.
Now In the future,
Bengaluru is expected to be the most favored property investment destination for locals as well as NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi, and Dehradun.
The pandemic led to a break in the supply chain across industries in the country that further resulted in an increasing demand for storage space. E-commerce is also expected to grow which will cause an increase in the demand for warehouses.
Overall 2020 had lots of ups and downs but in 2021, recovery of everything can be expected. So let’s plan to invest in something which will give you the best returns in the future. Contact OwnersTown for more information and details discussion, you can directly reach our real estate consultants for any advice.
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