Sector Outlook 2021 Driven By Affordable Housing & Digitization

Sanjeev Chandiramani, Chief Operating Officer, Ruparel Realty We entered 2020 with a positive outlook expecting necessary changes that would aid to sustain market equilibrium in the real estate sector. The nationwide lockdown brought everything to a standsti

BY Realty Plus
Published - Wednesday, 30 Dec, 2020

Sector Outlook 2021 Driven By Affordable Housing & Digitization

Sanjeev Chandiramani, Chief Operating Officer, Ruparel Realty We entered 2020 with a positive outlook expecting necessary changes that would aid to sustain market equilibrium in the real estate sector. The nationwide lockdown brought everything to a standstill and caused a disruption in the overall functioning of the industry. However, the COVID-19 pandemic helped to accelerate the pace of digitization within the industry. Developers reformulated their parameters and created a path for fundamental strategies to make sure that the sector stays afloat. With the implementation of virtual tours and web-based collaborations, developers were able to close deals online and homebuyers could conveniently visit multiple properties from the confines of their own homes. Coming to Mumbai’s real estate market, this year it continues to be the only market below the affordability threshold of 100 as per a report by JLL. This being said, it is important to note that Mumbai is the fastest moving city, showing a significant improvement in HPAI (Home Purchase Affordability Index) from 47 in 2011 to 95 in 2020. One of the biggest catalysts for this growth has been the support from both Central and State Government, for instance, initiatives such as a positive stance on the repo rate throughout the year. Additionally, significant reduction of stamp duty by the Maharashtra Government 300 basis points created a win-win situation for the government as well as the industry. In 2021, we foresee the surge in demand for affordable and Slum Rehabilitation Development projects especially in Mumbai that has already breached the affordability threshold and become affordable at an overall city level. This is also supported by the Maharashtra government that has already set up a stress relief fund of Rs. 700cr to 1000cr to support developers undertaking Slum Rehabilitation Authority (SRA) projects in the city. Furthermore with the digitization boost, the sector has already taken its baby steps in adopting technology and this will continue to grow in the future and developers will need to become more tech savvy and innovative particularly to merge customer experience with technology. We look forward to the continued Government support for the developer community by providing GST exemption, reduced stamp duty, single window clearance, and the lowest loan interest rates that will favor the potential and genuine home buyers. We are hoping to see multiple funds, such as the SWAMIH fund, getting set up by the government. During times like these, a large capital support by the government will help provide great relief. This will bring the much needed momentum in the market and tame the inflation in the system. In sum, it will definitely help in the revival of the real estate sector and also boost the economic confidence and long term commitments.