Real Estate is a globally recognised sector that despite its cyclical (and sometimes unforeseen) bubbles continues to flourish. In its entirety, the industry may be divided between retail, commercial, housing and hospitality. In this blog we will focus on housing or residential sector and more specifically the affordable housing segment, and its growth prospects in the Indian market.
In the last five years, many reports have shown that government policies (or trends)implemented in the last few years have contributed heavily to the growth witnessed in the residential sector. In fact, if reports are to be believed, then schemes such as Pradhan Mantri Awas Yojana (PMAY) and Rajiv Awas Yojana played a major role in boosting the industry to touch $180 billion in 2020. Further, it was found that the demand majorly came from millennials that wished to by a chic home at affordable prices.
As the new face of Indian realty, millennials look to purchase homes with the sole intention of spending less for more. In other words, affordable “luxury” home is the name of the game when it comes to catering the new generation of home buyers. However, at Mahira Homes we believe housing is a basic need that must be fulfilled for everyone regardless of what their income stream may look like. Which means, we not only cater to millennials but low-income families that do not necessarily fall under the same social class, so to speak.
So, what are these trends that propelled the market in 2020?
1. Housing for all mission:
The Union Government’s initiative aims to achieve “Housing for All” by 2022. Under the scheme, contributing factors such as the PMAY and a change in the rules and regulations of GST (a rate cut from 8% to 1% for the affordable housing segment) will continue to contribute to the growing demand and growth rates in the housing sector in the years to come. According to this change, any house worth less than 45 lakhs will be exchange hands for GST rate of 1%.
2. Lucrative Investment Prospects:
Many developers seem to be offering houses constructed under their name for a cheaper rate to clear their inventory. Further, home loan interest rates too seem to share a positive outlook as cheaper interest rates will likely continue to boost demand in the next couple of years.
Although many might not share this belief hence, Mahira Homes provides easy, low EMI options to all its home buyers. This will allow them to purchase a home at a cheaper than market cost to fulfil their dreams of owning a home.
3. Model Tenancy Law:
The much awaited “Model Tenancy Law” introduced earlier this year will allow rent laws to be equitable for both landlord and the tenant. This will likely continue to boost growth and demand in the market, especially for affordable housing projects in urban cities.
Though the real estate sector has been hit hard by the pandemic, the roots of recovery are being sowed. These will likely help in growing the affordable housing segment further. However, it also depends heavily on the number of COVID-19 cases – a upswing in the same may lead to the imposition of another lockdown that may further diminish incomes, if not relegate them altogether.