Owning a home is one of the biggest decisions made by any individual during his lifetime. While the pandemic slowed this process, it has also shaped the future of residential real estate in India. More than ever, consumers realized the importance of staying safe in their own homes and valuing it as the most credible financial asset. The timely and supportive measures by the government and RBI strengthened the confidence of developers and buyers. Similarly, developers demonstrated strength by adapting quickly to digitalization and giving consumers the power to stay safe and yet be able to invest in their dream homes.
While the clouds of uncertainty over the real estate sector are now subsiding across the country, the South India market is seeing a faster recovery and growth. Hyderabad and Bengaluru are the only cities that registered a Year-On-Year price increment of 4% and 3% in Q3 2020. (Link) South has always been a predominantly end-user market that maintained limited new launches and focused on the timely completion of projects.
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Here is Why South India Real Estate Has Been The Most Preferred And Stable Market:
One of the fundamental reasons why South India has been the prime growth driver of residential real estate during the pandemic as well is that the cities have thriving economic activities. However, it would be necessary to understand the dynamics of these cities and what makes them such an attractive real estate destination.
The least pandemic impacted sector and one of the key driving forces is the growth of IT/ITeS sector that is fueling the housing demand. The technology sector has contributed highly to the growth of Southern Indian cities and attracted huge investments from within the country and overseas. The techies occupy a major mid-segment real estate market in southern cities and add value to the city infrastructure. The IT/ITES boom led to the advent of the start-up culture and attracted the millennial force in the Southern cities. Most of the Southern Indian cities have good connectivity via Metro. Chennai – Bangalore infrastructure corridor is the key driver for the Chennai real estate market.
In an increasingly globalised world, skills and competencies will always be on the rise, especially in technology-driven cities like Bengaluru, Pune and Kochi. These cities have always attracted expats that have settled and love the city for its potpourri of culture, food and climate. The pleasant weather throughout the year and well-connected rail, road and air, caters to all age groups, where one can choose from, ultra-luxurious homes for high net worth individuals (HNIs) to affordable homes.
Considering all the favourable conditions, there has been an increased ratio of investment by the NRIs. NRIs prefer to choose credible developers with good track history and a proven legacy in the market to deliver quality projects. The Gulf, USA, UK, and Canada are the biggest source of NRI investments in India.
The reduction in reverse repo rate and extension of the moratorium on EMIs, deferring of working capital interest has been introduced to ease the stress in these challenging times. All these measures focused on improving the consumer and investment will spur the market demand, especially during the coming festive season.
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