Mumbai: The real estate industry after almost 8 years due to the control of the epidemic of Chinese virus Covid, fast recovery in the economy, cheap home loans, increasing investment at lower prices, and a boom in the stock market. Industry), especially in the housing segment, seems to be returning. During the second quarter (June-September) of the current financial year, there has been a jump of 92% in home sales in 8 major cities of the country including Mumbai, Pune. In Mumbai, sales have increased by 109%. Due to this, the shares of realty companies are also rising. Now in the festive season, Navratri, Dussehra, Diwali is expected to increase further. All major banks and housing finance companies, including SBI, Bank of Baroda (BOB), PNB, Kotak, HDFC, LIC Housing, have decided to take advantage of the festive demand. Loans have been made cheaper. Due to which the home loan is being available at the lowest rates ever from 6.50% to 6.70%.
Clients are increasingly preferring to own the projects of branded developers. However, despite the spurt in sales, prices have increased by only 5 to 10% at present, while the cost of construction has increased by 25% to 35%. However, it is more beneficial to take home loans from public sector banks, as government banks are always behind in increasing the rates and at the forefront of reducing them. Also, they do not charge any hidden charges. Experts believe that rising construction costs and pick-up in demand are leading to an upward trend in prices and there is a strong possibility of further upside.
There is a growing demand for housing: Dr. Hiranandani
Dr. Niranjan Hiranandani, National Vice President of industry body ‘NAREDCO’ and Managing Director of Hiranandani Group, says that the real estate industry is definitely returning. Affordable housing, mid and luxury, all three segments are witnessing good demand. The commercial segment has also started to recover. The Maharashtra government had given exemption in stamp duty last year, since then the demand started coming out in the industry. That relaxation was a big boost for the Covid pandemic-stricken industry and the rapid recovery in the economy after that has boosted customer confidence. Due to which the demand is continuously increasing. Apart from this, another major reason for the increase in demand is the home loan rates coming down to record low levels. Today home loan is available at only 6.5% rate. I have never seen such a low rate in the last 40 years. It is seen for the first time that the home loan rate is 6.5% and the inflation rate is 5%. That is a difference of only 1.5%. At present, the interest rates are also not likely to increase. A clear indication of this, in the monetary policy review on Friday, the Reserve Bank (RBI) Governor has kept the repo rates stable.
Reserve Bank’s emphasis on increasing growth by keeping interest rates stable
Dr. Hiranandani said that RBI is giving more priority to increase the growth of the country. For this, along with keeping the interest rates stable, the RBI has emphasized maintaining liquidity in the banking system. This is a very important step. With this policy, the growth of the country will accelerate and demand will also increase in the realty sector. Because due to the intensification of vaccination, now the fear of the third wave of Kovid has also ended. Although property prices have increased by only 5 to 10% so far, the reason for this is also the increase in construction cost. There will be an uptrend ahead.
Demand will increase in MMR
Dr. Hiranandani said that another important positive factor for the industry in the economic capital is rapid infra development. 300 km in MMR. Construction of metro line of 22 km. Major infra development projects like Mumbai Trans Harbor Link, Coastal Road Project and extension of the local railway line from Panvel to Karjat will accelerate the growth pace of Mumbai in the next 3 to 4 years. This will further accelerate the housing demand in township projects.
The right time to invest in real estate
Manju Yagnik, Maharashtra Senior Vice President of ‘NAREDCO’ and Vice President of Nahar Group, says that this festival season is the best time to invest in real estate. Because of the rapid growth of the country, investment in housing is increasing. Secondly, our construction cost has gone up by 35% in the last year due to an increase in steel, cement and other material prices and manpower expenditure by 30 to 40%. Whereas property prices have increased marginally. At present, developers are bearing the increased cost to drive sales and keep the market sentiment positive and are offering festival offers on new launches, but cannot be afforded for long. So the prices will go up going forward. Then the current prices may not be visible again.
Sales will increase in the festival
Manju Yagnik said that with the continuation of the culture of ‘work from home’ after Kovid, people are now focusing on buying their own house or those who have it, getting a bigger house. Also, people are now preferring to take such houses, which have social infrastructure like school, hospital, market, etc. and housing project has all facilities including community space, garden. Customers are also excited by cheap home loans. We expect the demand to be very good in the next 6 months. NRIs have also started increasing investment in India again. The second change has come after Kovid that instead of mall culture, now the demand for single retail stores is increasing more. Recently, the Central Government has decided to open the Coastal Zone of Mumbai for development. With this, the coastal areas of Mumbai will be developed like Hong Kong, Singapore and supply will also increase in the next 3-4 years.
Affordable housing most in demand
karma construction ltd. (Karda Constructions Ltd.) Chairman and Managing Director Naresh Karda said that the growth in real estate has started accelerating due to the control of the Kovid epidemic, a boom in the economy, and the creation of new jobs. Affordable housing is in high demand as every person wants to own his own house. And affordable housing is now difficult in metros like Mumbai, there is no house under Rs 1 crore here. Hence there is a good demand for affordable housing in Tier 2 cities like Nashik, Aurangabad. One BHK is available in Nashik for Rs 20 lakh. Secondly, due to infrastructure development, the realty sector in Nashik and other Tier 2 cities is getting a boost. With home loans becoming cheaper, the government’s 1% GST on homes up to Rs 45 lakh is boosting demand. The benefit of Pradhan Mantri Awas Yojana (PMAY) is also being taken more in Tier 2 cities. As far as prices are concerned, the cost of construction has gone up tremendously, but in cities like Nashik, the prices have gone up by only 15 to 20%. As costs are rising, so will the prices. So this is a good time to invest in property.
