Over the past decade, the real estate industry has become one of the largest contributors to India’s GDP, accounting for nearly 6-7% of the economy. There are at least 220 allied sectors that are dependent on the construction industry. Although the coronavirus pandemic brought things to a near standstill, the real estate industry is still expected to hit 13% by 2025. This is largely due to the rollout of the vaccine and stringent safety precautions that are being taken across India.
If you are looking for apartments in Chennai or new commercial properties for your establishment, then this article shows you how the market is advantageous to buyers.
Investment in residential properties in the new normal:
The pandemic had both negative and positive impacts on the construction industry. There was a short supply of raw materials and labour leading to delays in completion. On the other hand, the pandemic had a deep psychological impact on the people, elevating the importance of owning a home.
Right now in the first quarter of 2021, we have seen a rise in demand for spacious layouts, safety measures, in-house amenities, and proper maintenance and sanitation. There is a higher demand for ready to occupy units, but the stock is limited and customers are looking at under-construction projects in apartments in Chennai. Therefore real estate developers who are ready to move in stock at hand will fare better than others but only for a short period till their inventory lasts. Then the market will even out. The immediate revenue from the bookings of apartments in Chennai stabilises the cash flow for the developers. They can now complete their projects and undertake new ones to meet the demand.
With respect to the home buyers, the government, both state and central have introduced a lot of reforms. There are tax benefits and moratoriums announced that are aimed to encourage investment in real estate.
The Tamil Nadu State Government resumed registration activities by April 20th, 2020, so developers could start pushing their ready stock. There is also a reduction in stamp duty and registration fee till at least 31st of March 2021, although officials are debating about a permanent reduction.
A new tax relief has been announced by the Central Government for the period, November 12, 2020, and June 30, 2021. The permissible differential between circle rate and sale agreement has been increased from 10% to 20% for homes of value up to Rs. 2 Crores, an amount which will get you a nice luxury apartment in Chennai.
A moratorium period was also announced by the Government and the Reserve Bank of India. People could choose to waive their home loan payments for a 6 month period, from March 1, 2020, to August of 2020.
Investment in Commercial real estate in the new normal:
There is a slightly lesser demand for commercial spaces where most offices are still operating in a hybrid model where only essential staff come to work and the rest are encouraged to work from home. Most of the IT companies are facing minimum occupancy till mid-2021. Commercial space absorption will pick up from the end of the second quarter of 2021, or at least by the end of the year depending on the vaccination protocol. There are still investors looking for commercial spaces who are taking advantage of lowered rates. They are buying with a futuristic approach that the estate will be of use in the long term, even if it lies unoccupied now.
In 2021, there is also a steady investment flow from Global central banks. The interest rates will remain low for the foreseeable future. SEBI (The Securities and Exchange Board of India) announced reforms in the Real Estate Investment Trust rules that have seen to it that investment in commercial real estate with lucrative returns is higher than the other investment avenues. The changes bring in more positions for sponsors, and the minimum holding requirements for sponsors were also removed. This is also aimed at bringing widespread investor attention to commercial real estate.
At Lifestyle Housing we believe in educating our customers to make informed choices. The real estate industry is the safest area of investment you can make in 2021. We have apartments for sale in TNagar, Chennai, and several other prominent locations within the city. Let our experienced sales personnel guide you through the intricacies of homeownership. Fill in your contact details at Lifestyle Housing, and we will give you a callback.