The year 2019 was a not a particularly great for real estate sector, especially the residential market. Commercial or office real estate boomed in 2019 and is likely to further excel in 2020, while residential sales in the second half of 2019 plummeted 22 per cent compared the first half of the year.
Real estate stakeholders hope for support from Modi government, especially in easing liquidity, amid the ongoing slowdown.
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Hiranandani Group Managing Director Niranjan Hiranandani says for real estate, it's not just the new paradigm of RERA (Real Estate (Regulation and Development) Act, 2016) but also the development of new segments of real estate, which have the potential to change the narrative.
"Among the expectations is reintroducing the subvention scheme, especially for affordable homes as also the one time roll over/restructuring in case of stressed assets," he says.
He also says that there's need for further reduction in interest rates on home loans; interest subsidy where it can be provided; and enhancement of LTV (loan-to-value) for home loans to 90 per cent. Hiranandani, who's also President (Nation) of NAREDCO and ASSOCHAM, wants the Centre to keep companies and corporate entities on the 'priority list' for loans up to 90 per cent of the project cost for staff housing and rental housing segments.
The residential segment in top eight cities demonstrated unexpected resilience, recording a marginal growth of 1 per cent year-on-year (y-o-y) in sales volume in 2019, says a latest Knight Frank India report. Unsold inventories across the top eight cities in India improved in 2019, registering a 5 per cent decline to 445,836 units, but much is required to be done in order to revive the real estate sector.