Demand for Residential Real Estate bounces back post Covid 19.
Notwithstanding the deadly second wave of Covid-19 that led to severe economic repercussions in the months of April and May, signs of recovery for demand in residential Real estate were visible in June with a Pan India price growth of 1.7% during the quarter.
Despite the slum during April and May, the demand for housing in June’21 rebounded to March’21 levels.
The intermittent lockdown due to the second wave and the continuance of Work from Home policies ensured a rise in demand for 3 BHKs and above as home buyers are looking to upgrade for the need of an extra room to suit the requirement of home office.
This shift has led to the rise in demand share of 3 BHKs and higher configurations in Delhi Ncr reaching a all-time high of more than 65% of the overall demand share in all these markets.
Unlike the first wave, the recovery in demand of Residential Real Estate has been faster in the second wave. The residential makets of Delhi witnessed price corrections ranging from 1%-2.3% during the quarter that saw rising medical expenses and debt. The rise in price reflects the inherent strength of the housing sector even during these troubled times. The quarter also witnessed a rise in supply across Pan-India by almost 8% due to new launches. This recover can be attributed to factors such as a consistent demand in the large sizes properties and a higher flow of global PE funds ensured by good risk adjusted returns by the sector. This swift recovery signals a revival an stability in the industry.
The momentum gained in the last six months will continue across both supply and demand, especially due to the emerging needs of consumers for large size houses and all-time low interest rates. However, caution is required given the resurgence of Covid cases in the country and threats of another streak of lockdowns. The future of the sector is tied to speedy vaccine drives and completion of infrastructure projects like the metro and major highway projects.