New Delhi: The affect of the COVID-19 pandemic was obvertly visible in India’s housing sector. Sentiment in the real estate industry remained pessimistic during July-September owing to COVID-19, however as per a survey, the outlook for the next six months is optimistic with signs of revival in demand.
Recently, Knight Frank-Ficci-NAREDCO had released their ‘Real Estate Sentiment Index Q3 2020 Survey’ of developers, banks, financial institutions and private equity players operating in the sector. As per the survey, the ‘Current Sentiments Score’ improved to 40 points during the July-September period from a record low of 22 points in the previous quarter but remained in the pessimistic zone. However, the ‘Future Sentiment Score’ was in the optimistic zone at 52 points, up from 41 in the previous quarter.
A score of above 50 signifies ‘Optimism’ in sentiments, a score of 50 means the sentiment is ‘Same’ or ‘Neutral’, while a score below 50 shows ‘Pessimism’.
Knight Frank attributed the revival in sentiments to the remarkable upturn seen in the real estate business, especially in the residential segment, in the third quarter of 2020 as a result of the unlocking process’.
About 57 percent of the survey respondents opined that the economy is going to grow and improve in the next six months. The funding outlook also improved compared to the previous quarter. 38 per cent of respondents opined that the scenario would be better in the coming six months, while 31 percent felt that the current levels of credit availability would continue for the next six months.
Meanwhile, on November 12, Finance Minister Nirmala Sitharaman relaxed income tax rules to allow primary or first sale of housing units of up to Rs 2 crore at a price that can be 20 per cent below the stamp duty circle rate. Currently, the law restricts differential between circle rate and agreement value at 10 percent.
This relaxation, which is applicable till June 2021, is aimed at helping builders clear their unsold stocks, which is estimated at around 7 lakh in major 7-8 cities.
Analysts and market experts believe that the announcement comes as a significant benefit for both buyers and sellers as it will reduce and rationalise tax outgo to a great extent.
With PTI Inputs