Team NewsBarons connects with Dr. Niranjan Hiranandani, Chairman & Founder of Hiranandani Group and National President – NAREDCO to understand his views on real estate 2021. On his expectations from the upcoming union budget, he states ‘We hope the Hon’ble Finance Minister delivers the Budget, that India and its economy needs, to not just get out of the rut that the pandemic brought about but also grow to become a $5 trillion economy’.
NB: What is your outlook for Real Estate in 2021?
Niranjan: The Covid-19 pandemic wrought havoc on all sectors of the economy, real estate also suffered. The last four months of 2020 were ‘recovery time’ and this has continued through the first few weeks of 2021. The trends suggest that real estate in 2021 will continue to grow; albeit as per the ‘new normal’ and in sync with the ‘new paradigm’. Some segments may take longer to recover from the Covid-19 pandemic induced slowdown; some segments will post quicker turnarounds.
NB: Though the industry witnessed a rush in property registrations, Mumbai still saw a sales decline by 20%. Your views.
Niranjan: Both aspects, the rush in property registrations and the decline in sales need to be seen in proper context: it was not just the lockdown causing a severe economic slowdown. ‘Saving lives, followed by livelihoods’, as the Hon’ble Prime Minister put it, was not as simple as it sounded. The Covid-19 pandemic and related lockdowns impacted businesses, fiscal status of enterprises – not to forget, buyer sentiment; so even when the economy opened up post the lockdowns, enhanced sales did not start off right away once ‘Mission Unlock’ was announced. It took a combination of factors like stamp duty reduction by states (Maharashtra is an apt example), home loan interest rates being at historic lows and developers giving attractive offers, among others, which resulted in the turnaround, in form of enhanced sales through the last four months of 2020.
It is not easy to make up for the period of Covid-19 pandemic’s worst impact (almost 6 months) in just four months; the first few weeks of 2021 have shown sales holding steady – the positive sentiment looks like growing through 2021. Yes, Indian real estate will make up for the gaps of 2020, but to do so, it will take some more time.
NB: Touted as buyers market with low interest rates, reduced GST and registration charges, will sales continue to grow in 2021 understanding the impact of Covid on employment and small business.
Niranjan: Going by trends seen in the first few weeks of 2021, real estate will definitely see sales continue to grow. As we have seen over the years, when one segment of the economy is impacted by such challenges; other segments see a growth phase and overall, sales largely remain at similar levels. So, as job losses in some industries have been huge in numbers; there are industries where the resurgence has been quick, so not only have job losses reduced; in some instances, we have seen new job opportunities being created. The overall ‘health’ of the economy, measured in terms of jobs and profitability of small businesses, is usually a balancing act; some segments may see a slow down while others see a growth phase.
NB: Will increased metro connectivity have an impact on residential market rate.
Niranjan: Any infrastructure development has a positive impact on real estate market sentiment; in turn it also has a positive impact on price-points. As any micro-market gains in terms of attractiveness as a result of infrastructure growth; it results in higher demand–supply usually remains at a similar quantum, with obvious impact on price points for future sales. The impact of the Mumbai Metro network across the Mumbai Metropolitan Region (MMR) will be positively felt with the changed paradigm of comfortable connectivity.
NB: Your expectations from the upcoming Union Budget 2021.
Niranjan: Expectations are high from the upcoming Budget. The Hon’ble Finance Minister’s comments, as carried by the Media, has raised hopes considerably. The economy needs a boost on so many aspects that in turn, will impact different industries. From a real estate perspective, a good performing economy sees increased demand for commercial and residential real estate; so aspects like taxation benefits; measures that boost investment; a push to ‘Vocal for Local’; measures that give a boost to construction, infrastructure and real estate will positively impact 250-plus allied industries; create jobs and also help boost the GDP.