Kolkata Real Estate Industry in 2022
By Magnolia Realty | Jan 14, 2022
Last two years India’s real estate sector suffered a major setback during the second wave of the COVID-19. Specifically, the residential sector has been quickly recovery from the pandemic situation. A number of factors like Low-interest rates, a fall in prices of residential units and stimulus by State governments have supported the housing market revival in 2021. Now we are discussing the real estate industry in 2022.
Presently, released a report the title was “Reality of realty in a post-COVID-19”. This article captures the important trends that will pave way for the recovery of the sector. The pandemic has brought a change in customers behaviour and that is one of the factors enabling this sector to bounce back. The real estate sector has witnessed green shoots of recovery. It is expected to gain further momentum in 2022.
The way this pandemic posed a severe setback for the real estate sector the quick bounce-back took everyone by complete surprise. The pandemic turned into a strong factor supporting housing demand, and this is not just in India, the whole world. The surge in housing demand was also supported by low-interest rates everywhere.
During the pandemic, many people are doing their job at home. In that case, they were facing many issues. That’s why people felt that they need for a better house. Globally, the housing boom has been accompanied by a sharp rise in housing prices, resulting in fears of a housing bubble emerging. In India, the housing sales surge has not been connected by rising prices so far. After having fallen in the last few years, housing prices have stabilised in the last few months.
The debt-equity ratio has fallen from 1.40 in 2016 to 1.17 in 2021 for the top 10 real estate developers. The slowdown in the sector in the last few years has resulted in only players with better financial health surviving. Banks have also cautioned during the pandemic, resulting in outstanding bank credit to the commercial real estate falling by 0.3 per cent in the current year compared to the previous. Bank credit to the commercial real estate sector grew by 29 per cent before petering down in the subsequent months.
Including raw material prices, land and labour cost increases, housing prices are expected to go up. The strong demand will enable developers to pass on the increase in construction costs. The price increase is likely to be gradual and not sharp as being witnessed in many of the other countries.
IT Sector should support household income which has been seen as a strong hiring trend in Indian. The unorganised sector and the MSME segment, on the other hand, have been hit hard by the pandemic and need to bounce back. A large number of Indian’s housing story is led by affordable complex and for this category to do well, it is critical for the income at the bottom of the pyramid to grow.
The real estate sector has picked up from where it left off with renewed interests not only from individual buyers in residential real estate but also rapid expansion from GCCs looking to return to the office, and micro warehousing. With lower interest rates playing their part, along with government support.