How Technology is Propelling the Construction Industry

Technology has played a pivotal role in ushering in a new era of progress, efficiency, and innovation. From conceptualization to completion, technology has transformed every stage of the construction process, revolutionizing the way projects are designed, planned, executed, and managed.

One of the significant advancements is the Building Information Modeling (BIM). BIM creates detailed 3D models that integrate information on architecture, structure, and services. This digital representation enables architects and other construction professionals to collaborate seamlessly, detect clashes or conflicts early, and optimize designs. BIM facilitates better coordination, reduces errors, minimizes rework, and improves overall project efficiency.

In addition, the use of drones in the construction industry has skyrocketed. These unmanned aerial vehicles provide a bird’s-eye view of construction sites, allowing for accurate surveying, mapping, and monitoring. Drones capture high-resolution images, collect data, and generate comprehensive visual reports. This technology enhances safety by minimizing the need for workers to access hazardous areas, facilitates real-time progress tracking, and aids in identifying potential issues before they escalate.

Ms. Seema A Jobanputra, Director of the Ashar Group, recently wrote a published article and threw light on a few key future developments. New construction technologies have emerged and significantly impacted construction businesses in India. 57% of all proptech startups deal with construction and technology (contech). Technology has helped save around 25% of time and avoid rework up to 80%.

Robotic technologies and automation have also made significant contributions to the construction industry. Robots can perform repetitive or physically demanding tasks with precision and efficiency. For example, bricklaying robots can lay bricks faster and more accurately than humans.

Moreover, augmented reality (AR) and virtual reality (VR) technologies have transformed the way construction projects are visualized and experienced. AR and VR allow stakeholders to immerse themselves virtually. These technologies enhance communication, facilitate better decision-making, and improve client engagement.

Technology is changing the Indian real estate market in several ways:

  • Application Programming Interfaces (APIs): APIs are sets of rules and protocols that allow softwares to interact and exchange information seamlessly.
  • Internet of Things (IoT): The Internet of Things (IoT) refers to the network of physical objects embedded with sensors, software, and connectivity capabilities that allow them to collect and exchange data online.
  • Construction Management Software: It is a project management software that caters specifically to the construction industry. It enables the automation of several construction related processes and tasks.
  • Building Information Modeling (BIM): Building Information Modeling (BIM) is a digital collaborative process that consists of creating and managing information of a construction project throughout its lifecycle.

To conclude, technology has transformed the construction industry by introducing game-changing tools and techniques. From BIM to cloud computing, technological advancement has contributed to increased efficiency, improved safety, reduced costs, and enhanced project outcomes.

To read more such insightful articles, keep following the blog section on the Ashar website.

8 Things to Know before buying a Luxury Home in Mumbai

Real Estate Scenario in Nashik

The demand for luxury residences is continuously increasing significantly in the metro cities of India. Having a home in the nation’s financial centre is unquestionably a sign of status and prestige. It conveys a great deal about the buyer’s desired lifestyle. Here are some helpful pointers to take into account when buying a luxury property in Mumbai.
  1. The choice of a property from a reputed developer is crucial, in addition to the location. While pursuing luxurious homes by a developer in Mumbai, homebuyers must look for exceptional architectural design standards, cutting-edge technology, and engineering innovation. Such builders and developers in Mumbai ensure this level of elevated lifestyle and adhere to providing a comfortable, modern and stable architecture in the apartment. 
  2. Reviews from numerous buyers who have bought homes from developers will be reliable. Before you decide, you can evaluate the developer’s present properties and weigh their differences and similarities, which is crucial when buying a home because it is a significant financial investment. When determining the quality of a home, factors like effective use of space, structural integrity, plumbing, wiring, etc. are crucial, and real estate developers work hard to provide this industry-leading level of quality.
  3. Having a family-friendly environment is extremely crucial for all types of home-buyers. Always look to see if the space is large enough to set up a small play area at home, or an office set-up. Even the amenities provided by the builder must have kid-friendly activities, lounge and yoga decks for senior citizens, sports activities, etc. While looking at luxury developments in Mumbai, all of these considerations should be in the back of your mind.
  4. Always consider an apartment’s layout and design, especially when looking at 3 BHK flats. When purchasing bigger flats, the utilisation of space is crucial as it helps maximise your amenities and features. Be sure to check the regulations required to be fulfilled by builders about open spaces in your flat. 
  5. Purchasing a home is an investment in a desirable neighbourhood. One of the most crucial markers of a project’s richness and extravagance is the establishment. When purchasing a luxury property, you can be sure that your neighbours share your interests. When you buy a property from a reputable real estate developer, you can be confident that the local gentry meets your high expectations.
  6. Amenities distinguish a luxurious home from a regular one. Take into consideration the standard of the amenities that come with the home when purchasing a premium property.
  7. One thing to be cautious of is to make sure that flats in Mumbai don’t take you away from facilities. Make sure your property is close to hospitals, schools-colleges, shopping and entertainment most importantly connectivity to major routes so you reduce your travel time and spend most of your time with your loved ones.
  8. Purchasing a luxury property is an important decision because it requires a sizable financial commitment and should reflect the status and stature of the buyer. Therefore carefully consider the return on investment and appreciation of the property in the near future. 
A luxurious residence is a representation of grandeur, grace, and character. Be careful to select a property that delivers a feeling of opulence and is a permanent home.

Key factors influencing property rates

Real Estate Scenario in Nashik

Knowing the worth of a property is vital if you want to buy one or sell the one you already own. Knowing what elements influence this value is extremely beneficial since it makes predicting the cost of a property quite simple at any given point of time. 

Demand and supply have always been the major drivers of price. High demand and low supply leads to high prices, whereas low demand with high supply leads to low prices. As property availability decreases, the cost of existing available property increases. The reputation of a location in terms of people wanting to live there, when combined with a rise in the number of occupants belonging in a certain area, boosts its cost.

Let’s take a look at the factors that influence the value of property rates: 

Location:

Properties located in commercial areas have a higher market value than their residential counterparts. Brokers frequently quote greater prices for buildings in well-developed and approved colonies and areas than for those in less-developed and emerging places. Similarly, buildings developed on freehold ground attract a higher price than those constructed on leased land. When looking to buy a flat in any place, always pay close attention to the infrastructure of the neighbourhood. A place with a logically good infrastructure appears to have a better chance of being chosen by the buyer. In the same way, the value of real estate increases. Conveniences such as accessibility to major highways, closeness to schools, hospitals, stores, markets, and planned metro rail, among other factors, all contribute to higher land pricing.

Infrastructure Development & Amenities:

Property valuations are higher for properties with better infrastructure and modern amenities than for properties that lack proper electric connections, telephone lines, water sewerage facilities, and all other infrastructure such as community centres, children’s parks, swimming pools, gymnasiums, parking lots, or general stores. Property value is determined by the availability of essentials and amenities associated with pleasant living. Infrastructure development is the most important factor influencing real estate in India. 

Connectivity is one of the most critical needs for investors when investing. This leads to the idea that property near entertainment hubs, medical facilities, educational institutions, retail markets, and corporate areas, as well as other day-to-day amenities, is valued higher.

The presence of well developed roads, airports, flyovers, bus terminals, and other amenities in the neighbourhood also increases property rates and demand. 

Customization of flats:

When developers customise residential flats to meet the needs of homebuyers, the real estate price rises. For example, some buyers may want large porches or verandahs attached to their halls or bedrooms, modular kitchens, heat-resistant floors, or other unique changes.

Floor Level: 

Air, light, ventilation, scenic views, lift availability, etc are major factors that contribute to flats on varying floor levels. Flats on higher floors in premium residencies usually have a higher rate as compared to those on lower floors. 

As a result, the total value charged to the flat buyer increases in price. Every buyer should examine these drivers before deciding on their home purchase options to receive a fair assessment of the house that intrigues them. Better profits, painless liquidity, and lucrative investment can all be the result of careful investigation and research.

With over 2 decades of real estate experience, Ashar Group has invested in meticulous research and execution for all their projects. This is to ensure that property buyers need look elsewhere to fulfil their dream of a home complete with amenities, infrastructure, and a lifestyle. 

Renovating? Here’s how you can avoid the most common errors!

Real Estate Scenario in Nashik

As exciting as the prospects of renovating your space sound, it needs to be treated with equal caution. Whether it’s a DIY project for your new bedroom space or you are hiring a professional service, it is integral to move forward with utmost care and precaution. Renovations, in a nutshell, can be the most rewarding investments for life. However, before you take the first step, here are a few measures to take note of:

Budget Allocation

Pick a number that you can actually stick to. Budgeting when remodeling or renovating is highly important. Always have a cushioned budget that allows you to overspend over 15-20% because the end result will always be over the estimate you’ve received.

While in the process of renovating there will be instances when you may opt for pieces that you would want to spend more on. So always keep space to spend extra over your initial estimate.

Prioritizing Appearances

The perfect-looking furniture and paint job is important but what should take first place is ensuring structural fixes. Right from updating electrical systems to waterproofing walls, a healthy internal and external structure go a long way towards a long-lasting renovation job. Never ignore these minute details when finalizing and planning your budget.

The Right Contractor

Pinterest is great, but it is not the right place to turn to when you need expert advice. Having said that, never rush to hire a contractor. Always consult at least three-four contractors, get estimates, ask questions and understand the kind of job your space requires. A good contractor doesn’t easily come by, work towards hiring someone who will make your space beautiful and long-lasting.

Ambiguous Plans

This may sound like a repetitive broken tape, but always make a to-do list! Once the hammer hits it’s difficult to undo that. Before you start working on anything, have a blueprint of what your space truly requires. Do not move into remodeling without a plan as it may lead to spending more and the job half done. Having a well-set plan will always help move faster and cost less.

While these are only some measures that need to be taken into consideration when starting out, there is a lot that has to be considered prior to renovating your space. Bring an expert on board to help you plan. After all, renovations are an investment, one that needs to be carefully managed.

Latest Guide to Stamp Duty in Mumbai

Real Estate Scenario in Nashik

The joy of buying a new home is priceless, especially with skyrocketing prices and the demand for real estate increasing by the day. However, as exhilarating as the purchase is, the process is equally daunting. Right from own payments, loans, registration agreements, there are several factors to consider when purchasing a property. Once all of these are swept under the rug and you finally get possession, there stands the requirement for Stamp Duty and Registration under your name.

Don’t get all flustered, we’re going to cover the basics you need to know about charges for Stamp Duty and Registration along with steps on online payment.

The Maharashtra Stamp Act & Stamp Duty in Mumbai

Stamp Duty registration is a tax levied by state governments to property holders inclusive of commercial and residential spaces. The Maharashtra Stamp Duty act passed in 1958 makes it mandatory for all property holders to register their names in local municipal records for legal possession of the property. The current stamp duty on property is charged at a rate of 5% in Mumbai and 6% in the rest of the State. However, W.E.F. March 2021, a special rebate of 1% applies to female owners. Hence, any property transferred in a woman’s name is eligible to pay only 4% stamp duty. This does not apply to joint owners of the property.

Registration charges for properties in Maharashtra are charged at 1% if the value is below Rs. 30 lakhs or it’s charged at Rs. 30,000 for properties exceeding Rs. 30 lakhs.

There are a few factors that also determine payment of Stamp Duty:

  • Commercial and residential property types have different stamp duty rates
  • Market value and area of the property are considered to calculate stamp duty
  • Urban areas are charged a higher stamp duty whereas rural properties are charged lower rates.

Payment of Stamp Duty in Mumbai

To make the process easier for homeowners, payment and registration for Stamp Duty can be done through an online process. With a few simple clicks, one can easily pay through the e-stamp facility.

To make your e-payment, follow the below steps:

  • Visit the Maharashtra Stamp and Registration Department website.
  • The website allows you to either register on the website and pays or even pay without registration. Select ‘Citizen’ under ‘Type of User’, and then click on ‘Make Payment to Register your Document’. The website allows you two options, either you pay only stamp duty or stamp duty and registration fees together.
  • Fill in the necessary details requested such as District, kind of document, property details, etc.
  • Once you have filled in all required details, choose your payment gateway to make the payment online or across any banks via cash/cheque.

Voila! It’s all done! With the simplified online procedure, the government has made the payment of Stamp Duty and Registration hassle-free. A buyer can also request a refund on Stamp Duty under special circumstances such as incomplete documents, unsigned papers, etc.

Source: https://gras.mahakosh.gov.in/igr/frmIndex.php

Your dream home is just a Home-Loan away!

A roof over one’s head is a human being’s necessity. Getting a spacious, safe, equipped and accessible home is a dream. The best way to fulfill this dream, for many, is through a home loan. However, to be eligible for a home loan, one must meet certain requirements.

The eligibility criteria for a home loan is as follows:

  • Age:
    A person availing home loan should be within the age limit from 18-70 years. However, some banks and; institutions offer home loans to salaried, self-employed professionals and businessmen above the age of 23 only.
  • Net-worth:
    You can qualify for a home loan if your monthly income is more than Rs. 25,000. Those within the income bracket of Rs. 25,000-Rs. 40,000 can avail a home loan if their fixed obligation (Rent, EMI) does not exceed 50% of their income. Those with a monthly salary of over Rs. 40,000 can avail a home loan if their fixed obligation does not exceed 65% of their income.
  • CIBIL score
    A good CIBIL score of 650 is required. If you have a CIBIL score lower than 650, you still stand a chance to avail of a home loan by paying a higher interest rate, at a higher margin.
  • Company and Employment history
    You should have a stable income history and/or job continuity of a minimum of 3-5 years. The sector in which you work should not have been blacklisted by the bank. Additionally, some professions such as lawyers, beauticians, police personnel, builders, etc. may be considered negative by some banks.
  • Co-applicants
    Having a co-applicant increase your chances to avail of a home loan, it might
    also fetch you a higher loan amount. The co-applicant should have a share in the property. The list of co-applicants allowed is spouses, parents, siblings, and children.
  • Loan-to-value (LTV) Ratio
    Lenders calculate the LTV ratio using the below formula:
    LTV Ratio (%) is equal to Amount Borrowed divided by Property Value multiplied by 100.
    For example, if you wish to buy a house worth Rs.1 Crore and the LTV ratio of your
    the bank is 70%, then the maximum amount of loan that you can avail of is Rs. 70 lakh.
    The RBI has issued the below guidelines for the LTV ratio:
    For loan amounts of Rs. 30 lakhs and below, the LTV ratio for the loan can go up to 90% of the property, and for loan amounts above Rs. 30 lakhs, the LTV ratio can go up to 80% of the property value. For loan amounts above Rs. 75 lakh, the LTV ratio can go up to 75%. If the LTV ratio is 90%, at least 10% of the property value will have to be paid from your pocket and the rest of the amount can be funded through a home loan.
  • Property Approval and Valuation
    The property against which one wishes to avail a home loan should be legally approved and constructed by a reputed builder. For home loans of higher ticket size (Rs. 1 Crore & above), housing loan lenders prefer getting valuation details from independent valuers.Once a person meets all home loan eligibility requirements, they can easily make
    their dreams come true. It also comes with a series of benefits, some of them include:
    • Investing in Real-Estate is an appreciating asset:
      Property prices in India are slated to appreciate in the longer run. This makes home buying, one of the smartest forms of investment.
    • Home loans are a tax savior:
      As mentioned in the Income Tax Act – Section 24, a maximum deduction of Rs. 2 lakhs can be claimed by homeowners on their home loan interest for a self-occupied property.
      In case the property has been rented out, the tax exemption is Rs. 2 lakhs or actual interest paid by the taxpayer; whichever is lesser.
      Section 80C also gives the provision of a deduction of Rs. 1,50,000 on the Principal amount repaid.
    • Home loans improve credit score:
      Paying off your home loan EMIs on time is a great way to improve your credit score. If you make all your repayments on time and have a good credit score, availing of other loans such as a car or student loan becomes easy.
    • Home loans are a cost-effective way of funding a long-term asset:
      Home loans have the cheapest rate of interest in India as compared to other loans. It’s easy to get a home loan since it is secured against an asset.
    • Pradhan Mantri Awas Yojana (PMAY):
      A Credit Linked Subsidy Scheme (PMAY-CLSS) enables home loan borrowers purchasing or constructing their first pucca house to get subsidies credited into their
      loan account of up to 2.67 lakh.
    • Repay with ease :
      Home Loans let you enjoy longer repayment tenures ranging from 10 years to 30 years. Although, If you can pay higher EMIs, we’d suggest you opt for a shorter tenure Summing it up, you can now easily check your home loan eligibility with the help of a home loan eligibility calculator. More so, in today’s times when everything is available online, you can now avail of a home loan from the comfort of your home,
      with just a click. Happy home buying!

Source : https://www.bajajfinserv.in/home-loan

Real Estate Scenario in Nashik

Real Estate Scenario in Nashik

The skyrocketing prices and demands of real estate in Mumbai and Pune have led investors on the lookout for affordable and higher return destinations to invest in. One of the pocket-friendly destinations worthy of investment is Nashik. The emerging Wine Capital of India is proving as a worthy opponent to many metro cities. Here’s what has led to the rapid demand for this city.

In the past decade, Nashik’s residential market has boomed. With better infrastructure, connectivity, and government projects, Nashik has transformed into an attractive real estate destination.

The expansion of the IT sector and increasing industrialization has given way to many employment opportunities in the city. Along with the newly developed airport, many other government projects are in the pipeline. Due to this rapid infrastructural growth, Nashik is recognized as one of the fastest developing cities in India.

The geo-strategic location of the city is what earns it brownie points as the real deal in investment. Located in western Maharashtra, Nashik is surrounded by Mumbai and Pune making it a triangular corridor. While enjoying the up-gradation of the Mumbai-Nashik highway, and the airport, Nashik has become the hub for many migrants. However, this has not diluted the beauty and peace that prevails in the city. Pleasant climate, green pastures, and scenic beauty pretty much add to the charm of the city and secure the status of an upmarket locality. Endowed with a good quality of life, the city is now the destination for most millennial couples looking to invest in a pandemic friendly home-office.

While having some of the best infrastructural developments made by the government, certain localities add to the charm of the city making them viable for investment. Topping this list is Gangapur Road, with its well-connected roads and popular amenities in the locality. An iconic project in this area is Ashar Grapecity offering 4 BHK luxurious apartments. The project is equipped with state-of-the-art amenities such as a temperature-controlled swimming pool, fully equipped gym, and clubhouse, senior citizen zone topped with marvelous architecture, and unobstructed hill view perfect for leisure. The podium-style layout of the project ensures an elevated lifestyle in one of the most iconic areas in Nashik.

A steady increase in demand for property and the need for a second home have elevated the real estate status of Nashik. A clean and green environment, cultural and historical significance, road connectivity, pleasant climate, and many such factors make Nashik the ideal destination for investors.

So whether it is your first home or a second home for investment, Nashik should be on top of your list. Explore 4 BHK luxurious homes in the most prominent locality of Nashik at Ashar Grapecity.

The transition of real estate – from real to virtual

THE TRANSITION OF REAL ESTATE – FROM REAL TO VIRTUAL

Modern Problems Require Modern Solutions – this statement proves to be true in today’s pandemic struck world where the best of the world comes to you at your doorstep, or rather fingertips, thanks to digitalisation. It is a part of almost every sector – be it work from home, education, e-commerce, banking, retail, tourism, or real estate.

When the pandemic-induced lockdown forced businesses to shut down physically, they began to look for other avenues to reach out to their customers. It was here that digitalisation proved to be a silver lining.

While property portals have been around for more than a decade or so, buyers mostly preferred to visit the property physically, inspect the location, meet the developer/seller and sign the agreement. Property portals & real estate mobile applications were mostly used to narrow down the property search, view property pictures, and contact the developer & seller.

But, this is now a thing of the past. Pandemic introduced the ‘new normal’ – digitalisation. People have now got used to the digital way of life where they can get everything from pin to property in a click. If not completely, at least more than half of the real estate transaction process is conducted digitally. This includes virtual property visits, availing bank loans, online payments, documentation submission, the initial meeting with developers & sellers through video calls etc.

This is the buyers’ side of the story, the dipping real estate sales and the pursuit to recover sales and to remain relevant developers & sellers are placing their bets on digitalisation & modern technology.

So, how is the digital transformation of the real estate industry taking place?

Promotion, eventually leading to sales:

Social media is a powerful tool that can help developers & sellers generating leads and converting them into buyers. Developers & sellers are striking while the iron is hot by strengthening social media presence. Aggressive organic & inorganic marketing on Twitter, Facebook, Instagram & LinkedIn is just one of the ways to bridge the gap between the buyers & them, and increasing their business.

Understanding buyer behaviour:

Developers & sellers are leveraging the power of the digital marketing funnel to zero down on their target audience by understanding their needs better concerning home buying preferences. Digital marketing funnel keeps a track of customers navigating the web pages. Properties are filtered as per the requirement to convert leads into sales.

Additionally, thanks to AI and Big Data, developers & sellers can accurately analyse customer behaviour, distinguish between hot & cold leads, thus saving substantial time, customer service costs, and understand buyer behaviour.

Harnessing the power of technology:

Building Information Modelling (BIM) is transforming how real estate projects are done. A 3D model-based software – BIM facilitates planning, designing, constructing & managing buildings for construction, architecture, and engineering professionals.

Chatbots are a great way for developers & sellers to stay connected with their potential buyers 24×7. Through chatbots, developers & sellers can offer handholding to customers through their entire property-buying journey, thus developing nurturing relationships & fostering sales growth.

Virtual walkthroughs or e-Visits are a thing now. Augmented Reality (AR) and Virtual Reality (VR) are proving to be a magic wand for developers & sellers. AR & VR provide a surreal home buying experience to home buyers. They empower potential buyers to take a tour of property virtually – anytime, anywhere without physically visiting it.

Making the most of this technology, Ashar Group too conducted virtual meetings and e-visits for its potential customers during lockdown which proved to be fruitful.

Seal the deal digitally:

Shifting from conventional paper-based processes to digital documentation has resulted in nearly 10 times faster turnaround time in the overall sales deal. Digital documentation eliminates – long hours to prepare legal documentation of purchase agreement, loan processing and payments and human errors. The expense incurred for the storage of documents was massive for real estate players, digital documentation will reduce that and make it secure. Lastly, digital documentation makes it easy for consumers to purchase property in another city, state, or country.

To summarise, as the saying goes “The only constant in life is change.” Digitisation – apart from being the silver lining in a dark cloud of the COVID-19 pandemic, is here to stay. Whatever the reason be – to enhance transparency, increase sales, ease the selling process, gain an edge, attract new buyers, or stay in touch with loyal customers – developers & sellers should continue to harness the power of digital technology even in the post-pandemic world. While doing so, they should not forget that old is gold, hence interpersonal relations or human intervention cannot be ruled out.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. Ashar Group does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

The impact of COVID-19 Positive on Real Estate – Negative or Positive?

The impact of COVID-19 Positive on Real Estate – Negative or Positive?

Covid-19 came as a humanitarian challenge that changed the way people live, work, and play, maybe forever. It took away people’s lives and source of livelihood. The global economy saw one of the biggest downturns. There was a point in time when people were more scared of the pandemic-led lockdown than the pandemic itself, due to its devastating impact on the economy.

Real-estate, retail, finance, aviation and automobiles are the 5 sectors that are worst hit by COVID-19. Speaking of realty, last year when the nation went into a complete lockdown between March and May 2020, many new constructions stopped, sales took a hit, and new launches were postponed.

The pandemic brought in a domino effect on the realty sector. At first, the lockdown brought the construction activities to halt, then the fear of health & financial crises caused a mass exodus of migrant workers, the demand for social distancing & the sudden realisation of the importance of saving overspending led to negligible homebuyer enquiries and site visits.
Beginning June 2020, just when the realty sector started taking baby steps on the road to recovery through digital business strategies; and seeing a ray of hope through increased demand of virtual site visits, the country was struck by 2nd wave of COVID-19, this time, deadly than previous.

The cities where real estate activities have most suffered are Mumbai, Delhi, and Bengaluru amongst others. For instance, the Mumbai Metropolitan Region (MMR) in Maharashtra has witnessed a drop in property registrations. Experts say the recovery of the realty market in India could now prolong until 2022, and that it will be highly dependent on the way India deals with the second wave of Coronavirus.

THE OVERALL DAMAGE DONE – What reports say?

Going by a KPMG report, the real estate sector has incurred a loss of over Rs 1 lakh Crore since COVID-19 broke out, resulting in a serious liquidity crunch for real estate developers. The credit shortage brought down the residential sales from 4 lakh units in 2019-20 to 2.8 lakh units in 2020-21 across the top seven cities of India.

The overall residential demand declined by over 40 per cent in H1 of FY21, says the India Ratings and Research Private Limited (Ind-Ra) report. The agency believes that the sales will continue to decline until the pandemic is brought under control.

According to a report by Liases Foras, the pandemic-led lockdown cascaded the volume of unsold inventory from 15+ quarters at the end of FY-20, to 19+ quarters towards the end of H1 FY21. The volume of the unsold stock increased by an extreme dip in sales in Q1 and dampened recovery in Q2 2020.

IT WAS NOT WORKING ANYMORE FOR COMMERCIAL AND RETAIL REAL ESTATE

What simply existed as a concept in an organisation’s HR policies, now become a new way of life – Work from Home (WFH). The rise of the WFH concept led to the fall of the need & demand for office spaces.
According to a report by Cushman and Wakefield, the net leasing of office spaces declined from approximately 70 lakh sq. ft. in 2020 to around 35 lakh sq. ft. in Jan-Mar 2021.

In Q4, the immunisation drive by the Government picked up the pace, so did the Coronavirus cases. Thus delaying leasing & impacting leasing rates. The net leasing rates dipped by 33 per cent in 2020, and average commercial property prices declined by 7-10 per cent.

The demand for flexible workspaces such as WeWork & Awfis which had resurged in the last few months has declined since the second COVID-19 wave emerged. If the pandemic is brought under control soon, experts anticipate leasing 38 MN sq. ft. flexible workspaces in the coming year.

Speaking of retail real estate – data compiled by Statista says that retail mobility has declined by 55-60 per cent across India owing to the partial lockdowns and curfews across cities. Another factor contributing to this downfall is that people are no longer keen on visiting retail spaces – they can get everything, from food & clothes to entertainment delivered home, in just a click. Thanks to e-commerce and OTT platforms.

Looking at the other side of the grass, with WFH becoming a norm, residential real estate underwent a dramatic architectural change. Along with the routine bedroom, living room, washroom, kitchen & balcony, providing a dedicated WFH space has become a need of the hour in the upcoming projects.

DID THE LAW OF SUPPLY AND DEMAND AFFECT REALTY PRICES?

There are many points to be considered while discussing realty prices.

  1. While on one hand, during the 1st wave, some developers went all out to woo buyers by offering major discounts. We came across news such as:

    A 559 sq. ft. property of Hiranandani has been closed for Rs 86 lakh this month. A similar unit was transacted at over a Crore in MarchIn January, ready-to-move-in residential units – one in Ashoka Towers in Parel and the other in Omkar 1973 in Worli – were both available for around Rs 8.5 Crore. Then coronavirus struck & the same units were available in May for Rs 7.5 Crore and Rs 6.5 Crore.

    On the other hand, some developers continued to withhold prices due to limited profit margins. Unlike the first wave, the second wave of the pandemic has, so far, not impacted the prices of the residential market.

  2. Meanwhile, the pandemic-induced spike in prices of essential raw materials, like steel bars, cement, plastic, man-made polymers and resins, etc., are pressurising developers to hike the prices of new projects. The supply shortage is only making matters worse. There are chances that once the lockdown is lifted, we may witness minor hikes in property prices by the end of the next quarter, whereas we may see more significant corrections in prices by the end of 2021.

  3. During the 1st wave of the pandemic, people realised the value of owning a home for themselves and lucrative deals added fuel to the fire.In areas such as Maharashtra, where the stamp duty charges were reduced from 5% to 2% until 31 December 2020 and 3% from January 1 to 31 March 2021.

    Furthermore, RBI kept the repo rate unchanged at 4%, making home buying affordable by availing home loans for as low as 6.65% annual interest, which was in contrast with the average home loan interest rate of 8% in January 2020.

    While this is one side of the coin, COIVD-19 related constraints such as stay-at-home & social distancing, and delayed delivery of other support facilities, such as processing papers for applying for home loans, having the agreement for sale or flats registered, or reaching out to sales and marketing personnel to garner more information about the project are either discouraging buyers or coaxing them to postpone their home-buying plans for later. All of which is leading to a dip in sales.

    Although the vaccination drive seems like a silver lining in the dark cloud of COVID-19, the year 2021 is expected to remain challenging for the real estate sector.

THE DOMINO EFFECT

Iron & steel, cement, machinery are amongst the many industries that are dependent on the real estate sector. The pandemic inflicted heavy losses on them all during the year 2020. Approximately 250 SMEs reported losses that were accompanied by increased costs in 2020.

This was the condition during the 1st wave of the pandemic. The developers and manufacturers were more prepared and cautious during the 2nd wave. They made preparations such as installing labour camps, putting a shift-wise duty in place, and ensured adherence to COVID-19 protocols such as regular temperature checks, once-in-a-moth COVID-19 testing of labourers and installing sanitising stations on construction sites.

The government’s move of initiating a vaccination drive for those above 18 years of age will boost the construction activities as it will help the labourers to get vaccinated at the earliest. It will also make labourers feel safe & eventually reduce migration.

THE ROAD AHEAD

Post-phase-4 of lockdown, the realty sector slowly began its operations, and there came 2021, which seemed to be the year of recovery as COVID-19 vaccines were developed. But the happiness was short-lived as the pandemic’s 2nd wave gushed in, putting the developers and financial institutions in cautious mode. The resurgence of the pandemic has compelled financial institutions to avoid risky investments, adding to the woes of the real estate sector already suffering from a liquidity crisis. But it’s not all dark and gloomy for the realty sector like it’s said, “A smooth sea never made a skilled sailor” – Franklin D. Roosevelt. The realisation of the importance of owning a home in the consumers’ mind during COVID-19 can play an important role in increased residential property sales. Once the government accomplishes its goal to vaccinate its over 1.3 billion population and the fear of COVID-19 diminishes, there are high chances for the realty sector to experience market equilibrium. Points supporting this stamen are

  1. People may return to work, thus increasing the demand for commercial spaces;
  2. Increased e-commerce may lead to increased demand for industrial units to store inventory;
  3. Pandemic has turned many employed professionals into entrepreneurs, this may lead to a rise in demand for retail spaces;
  4. Virtual site visits have lured and made it possible for NRIs to invest back home;
  5. Low-interest rates (home loan interest rates are at below 7% now) and high tax exemption (rebate against home loan interest payment is as high as Rs 3.50 lakhs per annum) can make the option of owning a home attractive over renting;
  6. Many people, especially professionals who have permanently decided to return to their hometowns, who were earlier living on rent in Tier-1 metro cities like Mumbai, Bengaluru, Delhi etc. will look to buy homes, and finding employment in their hometown. Thus, increasing the demand for commercial, residential and retail spaces in Tier-2 cities.
Having mentioned that, here we are seeing the glass half full, but if we look at the half-empty glass, the pandemic has led to job losses and pay cuts, and the entire population is yet to be vaccinated. So we will be able to see a clear picture once the pandemic is tamed and the infection rate declines. Till then, it’s all about the wait-and-watch approach.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. Ashar Group does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.