{"id":3775,"date":"2021-08-10T05:17:18","date_gmt":"2021-08-10T05:17:18","guid":{"rendered":"https:\/\/www.omaxe.com\/blog\/?p=3775"},"modified":"2024-02-02T12:11:05","modified_gmt":"2024-02-02T06:41:05","slug":"residential-real-estate-growth-trajectory-way-forward-cbre-report","status":"publish","type":"post","link":"https:\/\/www.omaxe.com\/blog\/residential-real-estate-growth-trajectory-way-forward-cbre-report\/","title":{"rendered":"Residential Real Estate Growth Trajectory &#038; Way Forward: CBRE Report"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"3775\" class=\"elementor elementor-3775\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-4e2b3186 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"4e2b3186\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-extended\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-128cdac7 sc_inner_width_none sc_content_align_inherit sc_layouts_column_icons_position_left\" data-id=\"128cdac7\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-64cbb156 sc_fly_static elementor-widget elementor-widget-text-editor\" data-id=\"64cbb156\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.10.2 - 29-01-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#818a91;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#818a91;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>The CBRE released a report titled <b>\u201cResidential Real Estate in India: Challenges and Future Proofing Strategies for Developers<\/b>\u201d on August 9<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>The report stated that despite the pandemic in 2020, housing sales improved in Q4 (Oct-Dec) growing by 73% Q-o-Q driven by Pune, Bangalore, Delhi-NCR, and Mumbai. The trend continued in 2021 as well with housing sales in the first half of 2021 growing by 75% y-o-y.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:image {\"id\":3776,\"sizeSlug\":\"large\"} --><\/p>\n<figure><img decoding=\"async\" loading=\"lazy\" title=\"india residential supply and demand\" src=\"https:\/\/www.omaxe.com\/blog\/wp-content\/uploads\/2021\/08\/india-residential.png\" alt=\"india residential supply and demand\" width=\"602\" height=\"294\"><\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Property prices, the report said, have grown at a CAGR of 1-6% across the high-end segment and at around 2-7% across the mid-segment since 2010 \u2013 \u201cHousing affordability at its highest in over a decade.\u201d<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:gallery {\"ids\":[3777]} --><\/p>\n<figure>\n<ul>\n<li>\n<figure><img decoding=\"async\" loading=\"lazy\" title=\"housing affordability graph\" src=\"https:\/\/www.omaxe.com\/blog\/wp-content\/uploads\/2021\/08\/housing-affordability.png\" alt=\"housing affordability graph\" width=\"619\" height=\"196\" data-id=\"3777\" data-full-url=\"https:\/\/www.omaxe.com\/blog\/wp-content\/uploads\/2021\/08\/housing-affordability.png\" data-link=\"https:\/\/www.omaxe.com\/blog\/?attachment_id=3777\"><\/figure>\n<\/li>\n<\/ul>\n<\/figure>\n<p><!-- \/wp:gallery --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>The Per capita GDP grew at a CAGR of 4% between 2010 and 2020 with the top seven cities recording per capita above the national average of 5.3%<\/strong>. Between 2015 &amp; 20, per capita GDP outpaced an increase in property prices thereby \u201cimproving overall affordability\u201d, the report stated.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:image {\"id\":3778,\"sizeSlug\":\"large\"} --><\/p>\n<figure><img decoding=\"async\" loading=\"lazy\" title=\"per capital GDP \" src=\"https:\/\/www.omaxe.com\/blog\/wp-content\/uploads\/2021\/08\/capita-GDP.png\" alt=\"per capital GDP \" width=\"609\" height=\"330\"><\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>With the onset of the pandemic, <strong>the Reserve Bank of India reduced the repo rate to 4% in May 2020<\/strong> and has since then maintained an accommodative stance. Gradual transmission of rates has led to lending rates dropping to a low of 6.9%.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:image {\"id\":3779,\"sizeSlug\":\"large\"} --><\/p>\n<figure><img decoding=\"async\" loading=\"lazy\" title=\"repo rate and lending rate trend\" src=\"https:\/\/www.omaxe.com\/blog\/wp-content\/uploads\/2021\/08\/lending-rate-trends.png\" alt=\"repo rate and lending rate trend\" width=\"594\" height=\"292\"><\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>The government has, through various interventions like reduction in GST, RERA, and other measures kept up the emphasis on affordable housing<\/strong>. From granting infrastructure status in 2017 to the extension of Tax holiday till 31 March 2022 and other measures in the last five years have helped the sector maintain its momentum.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>Bank credit remains a hindrance<\/strong> and the sources of funding for residential real estate remain limited, selective, and expensive, notes the report. \u201cScheduled commercial banks have been selective and lent to only creditworthy projects backed by prominent developers, resulting in limited options for new \/ smaller developers \u2013 a scenario that is unlikely to change soon, especially post COVID-19,\u201d adding \u201cthe pandemic has accentuated the problems for NBFCs to disburse fresh loans.\u201d<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>The report also points to <strong>operational constraints that have engulfed the sector.<\/strong> \u201cKey materials such as steel, cement, copper, aluminum, etc. which have a direct bearing on construction costs have witnessed a significant increase in recent months. In addition, labour cost (and now availability) and logistical constraints have exerted pressure on costs,\u201d the report notes.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>The report also points to the regulatory constraints<\/strong>. \u201cThe approval process could take six to nine months or even more.\u201d Besides, high tax on construction input material is posing a cascading effect. \u201cThe GST on key construction material such as marble, tiles, glass and prefabricated structural components, etc. varies between 12-18% for certain input materials. This results in a cascading tax impact on developing housing units and dents the bottom-line, translating into higher unit prices for end-users.\u201d<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>\u201cWhile there is a noticeable improvement in the overall Ease of Doing Business Ranking, key parameters such as registering a property, paying taxes, enforcing contracts, and resolving insolvency still need attention,\u201d the report said.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>The report points to how the sector combat stress by future-proofing. It said, \u201cSince the fundamentals of the residential sector remain strong (attractive mortgage rates, steady capital values, attractive developer schemes), ensuring timely completions to maintain a steady cashflow stream is an important source of self-financing for RE developers.\u201d<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>The report points to how <strong>technology can be an enabler<\/strong>. \u201cImprovements in construction techniques and adoption of tech can help accelerate timelines, improve quality and, in the long run, reduce costs.\u201d<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Concluding the report with <strong>emerging trends post-COVID<\/strong>,&nbsp;<a href=\"https:\/\/www.cbre.com\/\" target=\"_blank\" rel=\"noopener\">CBRE&nbsp;<\/a>says, demand for bigger homes, flexible home designs, demand on rising in peripheral locations, preference for green and smart homes, revamped contact management practices, reassessment of labour management practices are some of the trends going forward.<\/p>\n<p><b>Also read :&nbsp;<\/b><a style=\"font-size: 17px; background-color: #ffffff;\" href=\"https:\/\/www.omaxe.com\/blog\/why-it-is-the-right-time-to-invest-in-residential-properties-in-chandigarh\/\" target=\"_blank\" rel=\"noopener\"><b>Why it is the Right Time to Invest in Residential Properties in Chandigarh<\/b><\/a>.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>The CBRE released a report titled \u201cResidential Real Estate in India: Challenges and Future Proofing Strategies for Developers\u201d on&hellip;<\/p>\n","protected":false},"author":1,"featured_media":3776,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[66,297],"tags":[501,582,115,583,249,580,581],"wbAuthor":{"name":"Omaxe","link":"https:\/\/www.omaxe.com\/blog\/author\/omaxe\/"},"wbDate":"Aug 10, 2021","wbCategories":{"space":"<a href=\"https:\/\/www.omaxe.com\/blog\/category\/real-estate-news\/\" rel=\"category tag\">News<\/a> <a href=\"https:\/\/www.omaxe.com\/blog\/category\/real-estate\/\" rel=\"category tag\">Real Estate<\/a>","coma":"<a href=\"https:\/\/www.omaxe.com\/blog\/category\/real-estate-news\/\" rel=\"category tag\">News<\/a>, <a href=\"https:\/\/www.omaxe.com\/blog\/category\/real-estate\/\" rel=\"category tag\">Real Estate<\/a>"},"wbComment":81,"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.0 (Yoast SEO v20.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Residential Real Estate Growth Trajectory &amp; 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