India’s real estate sector development a view

Although the real estate sector development in India has grown rapidly, it has to be said that the rise in prices of cement and other construction materials has had a major impact. Many leading construction companies are unable to cope with the price hike and have seen the price of new houses rise by 10-15 percent. As a result, sales of new homes are expected to be slightly lower in 2022.

But that is not the case in 2020 and 2021, especially as luxury home sales are witnessing manifold growth

Home Loan Interest

Sales of new homes have been booming due to people staying at home due to the coronavirus pandemic, lack of space, more money being saved by working from home, and the multi-year decline in home loan interest rates.

Real estate sector

Similarly, the number of sales of luxury houses has increased paradoxically due to the fact that the central and state governments have given many concessions to the real estate sector development. Mumbai, especially known for its luxury homes, has seen a double-digit growth.

Mumbai

Sales of luxury homes priced above Rs 10 crore in Mumbai doubled to Rs 20,255 crore in 2021. It has achieved sales of luxury homes worth Rs 9,492 crore in 2020.

For luxury homes

This figure includes sales in the primary (new sales) and secondary (resale) markets. The total number of luxury homes sold in Mumbai was 1,214 units in 2021 and 548 units in 2020.

Main area Mumbai has Worli, Lower Parel, Bandra, Dardeo, Prabhadevi and Andheri as major luxury home sales markets. Worli alone captures 20 percent of the overall Mumbai luxury market.

Chennai

In Tamil Nadu, real estate has been paralyzed for the past three years due to the coronavirus. Not only having that, 40-50% real estate builder leaved the real estate industry. In this case, the real estate demand has increased again.

South Chennai is mostly invested in apartments. But in the suburbs of Chennai, land, detached house, villa and apartment are being invested in a mixture. People who bought small houses are now buying bigger houses. While Indian real estate sales average growth of 7% percent, real estate sales growth in Tamil Nadu is 22 percent growth along with other cities in India like Bangalore.

At the same time, there are some things that the government needs to do. It is difficult for builders to get loans from banks due to lack of industry recognition for real estate. There is a situation where you have to buy outside the bank at high interest rates. More than 100 sectors such as iron, cement, sand are benefited along with real estate. Therefore, it is very necessary to give sectorial status to government real estate. If such changes take place, the real estate sector is more likely to grow.

Expert point

We all faced a crisis during Corona. All the countries, starting with the superpowers, experienced economic recession. Loss of job, loss of income was all there. Due to this, the real estate was also in a sluggish state. But now real estate is better. Even the people who have been putting off buying a house for so long and showing reluctance are now interested in buying a house. Accordingly, the interest rate is also low. Builders were also active in meeting the demand of the market.

As a result, India’s real estate is growing from a sluggish state. As for the cost of houses, mainly the cost of land, cost of construction materials, cost of labor, marketing, finance cost approval cost, cost of connections etc. are all calculated. All these are getting more and more expensive every day. The prices of goods are increasing while sleeping. That too has gone up by up to 70% in recent times alone.

As a result, the prices of houses will rise significantly. Housing prices are likely to fall only if land prices fall. But there is no chance of land prices falling. Land owners are not willing to sell at low prices. It does not matter if the land is not sold. They just say that they will not sell at low prices. As a result, there is no chance of house prices coming down. At the same time, companies have decided to sell at prices lower than those in developed cities to attract people in newly emerging cities and expanding areas.