Forced lockdown led to an increasing demand for plotted developments

By Arjun Kumar
The Indian real estate sector contributes around 6 percent to the GDP and this figure is expected to rise to 13 percent by 2025. The housing sector has a great future ahead as mortgage penetration is very low in India and the family size is large.
Emphasizing on the significance of the housing sector and the changes it has went through over the course of the pandemic, #IMPRI Center for Habitat, Urban and Regional Studies (CHURS), IMPRI Impact and Policy Research Institute, New Delhi presented a special lecture with Prashant Thakur on The Housing Market amidst the COVID-19 Pandemic as part of the series The State of Cities – #CityConversations.
Dr. Rumi Aijaz, Senior Fellow, Observer Research Foundation (ORF), New Delhi, welcomed the speaker and discussants before delivering his enlightening comments. He said, “The housing sector does not need an introduction. Its significance is very well understood.” It is also important as it offers opportunities to various stakeholders like architects and housing has become a dire need in today’s world according to Dr Aijaz.
He further mentioned that there is a shortage of housing in India regardless of the socio-economic conditions despite numerous housing programmes established by the Government. Also, there are unfortunate incidents in large cities where air quality is deteriorating and disruption in livelihoods is observed. He said the pandemic and its persistence is a topic of concern as it has had many adverse consequences on the housing sector.

Introduction to the Housing Sector

Prashant Thakur, Senior Director and Head of Research, ANAROCK, Mumbai, began his talk by presenting the evolution of industry and its impact. The Indian real estate sector contributes around 6 percent to the GDP and this figure is expected to rise to 13 percent by 2025.
“This sector is crucial for India’s ambition to become a 5 trillion economy by 2025”, said Prashant Thakur.
Speaking of various countries, he mentioned that China and Brazil are the closest comparisons with respect to evolution in the housing sector. In India, the urban housing shortage is 11.2 million and home ownership as a percent of urban population is only 32 percent.

Demographic Factors

The housing sector has a great future ahead as mortgage penetration is very low in India and the family size is larger when compared to China and Germany. At the same time, Mr. Prashant emphasized that India has a young population and that around 54 percent of the population comprises the working class.
However, the sector was in bad light for many years, owing to several factors like high fragmentation, low entry barriers, illegal construction and other unscrupulous activities. Moreover, the market was driven by speculators which is not optimistic for the long-term.

Changes in the Real Estate Sector

The transformation journey of the real estate sector can be mapped into: fearless, regulated, controlled plus outlier and cautious revival according to Mr. Prashant. In 2013-2014, there was a supply of more than 10 lakh units and it was mainly driven by investors and in 2018-2020, the supply dropped to 5.6 lakh units as the sector was more regulated during this period.
The supply-absorption dynamics of pre-COVID and post-COVID shows that the industry was slowing down and this slowly reversed with the advent of COVID as the process of consolidation occurred. A sharp recovery is seen and Mr. Prasant attributes this to affordability and a market driven by end users.
After the government announced various incentives for housing projects, the share of affordable housing as a percentage of total new launches, went up to 44 percent as of June 2019. The peripheral areas are gaining prominence after COVID, with the hybrid working models, improved connectivity and cheaper land parcels. Sensing this trend, developers are launching many projects in the periphery.

Emerging Trends Due to COVID Outbreak

The forced lockdown has led to an increasing demand for plotted developments for sustaining better social distancing standards and weekend homes along with farmhouses are also in demand according to Mr. Prashant.
The market has changed from being driven by speculators to being end-user driven and millennials, who preferred renting to buying, as evident in average age of homebuyers which has fallen from 54 years to 29 years in the past two decades.

Real Estate Consumer Survey (H1 2021)

The findings of the Real Estate Consumer Survey state that 47 percent of property seekers are looking for nearing completion units and 71 percent of them are looking to buy for self-use. Mr. Prashant emphasized that 77 percent of them were concerned about developer credibility, 56 percent about location, 81 percent about pricing, 68 percent about design and 55 percent about reliable post sales services which indicates that most of them are end-users.
Digital adoption in the real estate sector was very low but the pandemic has accelerated this method. This is substantiated by the fact that 60 percent of the entire buying process is conducted online as opposed to the 39 percent in the pre-COVID era.
Dr Rumi Aijaz mentioned that the market seems to be in a better place now due to increased demand and this appears to be a good sign for both buyers and sellers. He agreed that peri-urban areas are growth centres where many upcoming construction projects are coming up.
Pavan Dixit, Co-founder, property360degree, Hubli, Karnataka, commented that prices were mostly remaining at the same level with the exception of minor drops. “As part of the rental market, the sizes of the properties are increasing” said Mr. Pavan, agreeing with Mr. Prashant. Mr. Pavan posed a question with respect to increasing rental yield.
Dr Akshaya K. Sen, Joint General Manager (Economics) & Fellow, Human Settlement Management Institute (HSMI), Housing & Urban Development Corporation Ltd (HUDCO), New Delhi, acknowledged that the housing sector has strong multiplier effects – an investment of 1 lakh rupees will create four jobs. NCAR study further mentions that this sector has an output multiplier of 5 – one unit of investments will give an output of 5 units. Thus, it is crucial to accelerate investment in the housing sector. Dr Akshaya spoke about governance-related issues such as many approvals are required, and delays and corruption are rampant.
He continued to speak about access to affordable housing finance – the funds available to economically backward groups is less than 4 percent. The other 96 percent of the funds are available to those sections where the housing shortage is less.
Mr. Prashant said that the housing sector has oversold properties as an investment while the demographic profile indicates that the housing rental would remain in check due to rising supply. The question was posed on the way forward of the sector. Mr. Prashant responded by saying that the construction sector is a very important one and the current investments in the real estate sector would contribute around 13 to 15 percent in the next 5 years.
—
Acknowledgement: Ritheka Sundar is a Research Intern at IMPRI

Comments

History, culture and literature of Fatehpur, UP, from where Maulana Hasrat Mohani hailed

By Vidya Bhushan Rawat* Maulana Hasrat Mohani was a member of the Constituent Assembly and an extremely important leader of our freedom movement. Born in Unnao district of Uttar Pradesh, Hasrat Mohani's relationship with nearby district of Fatehpur is interesting and not explored much by biographers and historians. Dr Mohammad Ismail Azad Fatehpuri has written a book on Maulana Hasrat Mohani and Fatehpur. The book is in Urdu. He has just come out with another important book, 'Hindi kee Pratham Rachna: Chandayan' authored by Mulla Daud Dalmai.' During my recent visit to Fatehpur town, I had an opportunity to meet Dr Mohammad Ismail Azad Fatehpuri and recorded a conversation with him on issues of history, culture and literature of Fatehpur. Sharing this conversation here with you. Kindly click this link. --- *Human rights defender. Facebook https://www.facebook.com/vbrawat , X @freetohumanity, Skype @vbrawat

Budget for 2018-19: Ahmedabad authorities "regularly" under-spend allocation

By Mahender Jethmalani* The Ahmedabad Municipal Corporation’s (AMC's) General Body (Municipal Board) recently passed the AMC’s annual budget estimates of Rs 6,990 crore for 2018-19. AMC’s revenue expenditure for the next financial year is Rs 3,500 crore and development budget (capital budget) is Rs 3,490 crore.

New RTI draft rules inspired by citizen-unfriendly, overtly bureaucratic approach

By Venkatesh Nayak* The Department of Personnel and Training , Government of India has invited comments on a new set of Draft Rules (available in English only) to implement The Right to Information Act, 2005 . The RTI Rules were last amended in 2012 after a long period of consultation with various stakeholders. The Government’s move to put the draft RTI Rules out for people’s comments and suggestions for change is a welcome continuation of the tradition of public consultation. Positive aspects of the Draft RTI Rules While 60-65% of the Draft RTI Rules repeat the content of the 2012 RTI Rules, some new aspects deserve appreciation as they clarify the manner of implementation of key provisions of the RTI Act. These are: Provisions for dealing with non-compliance of the orders and directives of the Central Information Commission (CIC) by public authorities- this was missing in the 2012 RTI Rules. Non-compliance is increasingly becoming a major problem- two of my non-compliance cases are...

Celebrating 125 yr old legacy of healthcare work of missionaries

Vilas Shende, director, Mure Memorial Hospital By Moin Qazi* Central India has been one of the most fertile belts for several unique experiments undertaken by missionaries in the field of education and healthcare. The result is a network of several well-known schools, colleges and hospitals that have woven themselves into the social landscape of the region. They have also become a byword for quality and affordable services delivered to all sections of the society. These institutions are characterised by committed and compassionate staff driven by the selfless pursuit of improving the well-being of society. This is the reason why the region has nursed and nurtured so many eminent people who occupy high positions in varied fields across the country as well as beyond. One of the fruits of this legacy is a more than century old iconic hospital that nestles in the heart of Nagpur city. Named as Mure Memorial Hospital after a British warrior who lost his life in a war while defending his cou...

Licy Bharucha’s pilgrimage into the lives of India’s freedom fighters

By Moin Qazi* Book Review: “Oral History of Indian Freedom Movement”, by Dr Licy Bharucha; Pp240; Rs 300; Published by National Museum of Indian Freedom Movement The Congress has won political freedom, but it has yet to win economic freedom, social and moral freedom. These freedoms are harder than the political, if only because they are constructive, less exciting and not spectacular. — Mahatma Gandhi The opening quote of the book by Mahatma Gandhi sums up the true objective of India’s freedom struggle. It also in essence speaks for the multitudes of brave and courageous individuals who aspired to get themselves jailed for the cause of the country’s freedom. A jail term was a strong testimony and credential of patriotism for them. The book has been written by Dr Licy Bharucha, an academically trained political scientist and a scholar of peace studies and Gandhian studies, who was closely associated throughout her life with those who made the struggle for India’s independence the primar...

Urgent need to study cause of large number of natural deaths in Gulf countries

By Venkatesh Nayak* According to data tabled in Parliament in April 2018, there are 87.76 lakh (8.77 million) Indians in six Gulf countries, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). While replying to an Unstarred Question (#6091) raised in the Lok Sabha, the Union Minister of State for External Affairs said, during the first half of this financial year alone (between April-September 2018), blue-collared Indian workers in these countries had remitted USD 33.47 Billion back home. Not much is known about the human cost of such earnings which swell up the country’s forex reserves quietly. My recent RTI intervention and research of proceedings in Parliament has revealed that between 2012 and mid-2018 more than 24,570 Indian Workers died in these Gulf countries. This works out to an average of more than 10 deaths per day. For every US$ 1 Billion they remitted to India during the same period there were at least 117 deaths of Indian Workers in Gulf ...

Uttarakhand tunnel disaster: 'Question mark' on rescue plan, appraisal, construction

By Bhim Singh Rawat* As many as 40 workers were trapped inside Barkot-Silkyara tunnel in Uttarkashi after a portion of the 4.5 km long, supposedly completed portion of the tunnel, collapsed early morning on Sunday, Nov 12, 2023. The incident has once again raised several questions over negligence in planning, appraisal and construction, absence of emergency rescue plan, violations of labour laws and environmental norms resulting in this avoidable accident.

UP tribal woman human rights defender Sokalo released on bail

By A Representative After almost five months in jail, Adivasi human rights defender and forest worker Sokalo Gond has been finally released on bail.Despite being granted bail on October 4, technical and procedural issues kept Sokalo behind bars until November 1. The Citizens for Justice and Peace (CJP) and the All India Union of Forest Working People (AIUFWP), which are backing Sokalo, called it a "major victory." Sokalo's release follows the earlier releases of Kismatiya and Sukhdev Gond in September. "All three forest workers and human rights defenders were illegally incarcerated under false charges, in what is the State's way of punishing those who are active in their fight for the proper implementation of the Forest Rights Act (2006)", said a CJP statement.

Sardar Patel was on Nathuram Godse's hit list: Noted Marathi writer Sadanand More

Sadanand More (right) By A Representative In a surprise revelation, well-known Gujarati journalist Hari Desai has claimed that Nathuram Godse did not just kill Mahatma Gandhi, but also intended to kill Sardar Vallabhbhai Patel. Citing a voluminous book authored by Sadanand More, “Lokmanya to Mahatma”, Volume II, translated from Marathi into English last year, Desai says, nowadays, there is a lot of talk about conspiracy to kill Gandhi, Netaji Subhas Chandra Bose, and Shyama Prasad Mukherjee, but little is known about how the Sardar was also targeted.

Search This Blog