All businesses are cyclical and goes through their respective troughs and crests, and real estate sector is no exception.
Some of the challenges that the sector is facing are increase in the input costs, GST issue regarding input credit, slow adoption of technology in construction, scarcity or high capital costs of land parcels, highly complicated supply chain leading to ambiguity in construction timeline.
COVID has compelled multiple real estate businesses to run on a comprehensive and high impact, profitable, 360-degree digital delivery model.
Although, the use of technology in marketing, customer acquisition and engagement has picked up, lowering the construction completion timelines and costs is critical to sustain profitability margins of 25% and above. This margin is a benchmark for any thriving industry of this scale and holds true for real estate as well, especially due to its capital and human resource intensive nature.
Government of today is proactive, fleet footed and has been taking timely decisions. Steps like stamp duty cuts, lower rate of interest, allocation of Rs 48000 Cr for PMAY and focus laid on nurturing new smart Tier 2&3 cities in the current budget are welcome steps that will boost sustainable progress in the housing sector.
Real estate sector could not have imagined running businesses online, but pandemic made us think hard on how to continue to be relevant.
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