Recommendations for Govt. to Help South Delhi Property Market Post COVID
Real Estate is a 2nd largest employer after agriculture with Market Size in 2019 was over 12,000 Crore. The real estate industry holds great importance in terms of generating significant revenues, offering great employment opportunities, and providing business opportunities to established and budding entrepreneurs. South Delhi property market has been an outlier in the overall residential market with consistent and strong growth over the last few years.
Post Lockdown Outlook: With social distancing being the best measure against coronavirus, there is going to be a dip in site visits. South Delhi Buyers could postpone their property purchase decisions by a few months.
The Predicted Demand Cycle of South Delhi Buyers
However, as per Dr. Property’s analysis, once the pandemic wave settles, we can expect an uptick in demand for spacious homes, in integrated self-sufficient posh colonies like VasantVihar–Shanti Niketan, Greater Kailash–Pamposh Enclave, Green Park–Safdurjung Enclave, Defence Colony, South Extension, Jorbagh–Golf Links Areas – as work from home will become more common. Here the role of trusted real estate advisor like SouthDelhiPrime.com will come into play in assisting Home Buyers in South Delhi with required services.
At SouthDelhiPrime.com, we are a research & strategy driven real estate team providing strategic advice on construction, redevelopment, collaboration, legal, regulatory, and tax-related matters in an integrated manner. Since 1997, as an active participant in shaping South Delhi’s Real Estate environment, we at SouthDelhiPrime.com have the expertise & most importantly – the VISION – to navigate the complexities arising out of the unpredictable environment.
To minimize the Predicted Demand Cycle of South Delhi HOME BUYERS Govt. can and should play a ‘Fairy God’ under the current scenario for the stakeholders of South Delhi Property market:
- Home Loan Interest Rates
- Govt has currently hinted at reduced interest rates by lowering down RBI’s repo rate by 75bps to 4.4% to mitigate the impact of COVID 19. The corrected prices & reduced interest rate with the need to own a bigger home to maintain social distancing will surely give a big boost to consumer’s sentiment.
- As per estimates, the Home Loan Interests will be the lowest in 15 years.
- Delay in Construction to be counted as Force Majeure
- With ongoing construction work getting impacted, given the unavoidable and unusual event like COVID19, there is an increasing demand for COVID 19 to be declared as ‘force majeure’ under section 6 of the RERA Act providing an extension of project registrations granted to Builders. This will exempt the builders from penal charges and extend the timeline of ongoing projects by a year through the extension of project registration.
- Stamp Duty Relaxation :
- Stamp Duty waivers or reduction can give a further push to South Delhi property sales. For eg: Maharashtra reduced its stamp duty by 1% to aid home sales.
- GST Tax Holiday :
- GST on booking or under construction projects should be temporarily removed, to motivate home buyers to buy stock in booking.
- The GST/ Service tax on under-construction projects was imposed by the Congress Govt. to disincentives speculative investors. Speculation and Investors both became negligible in the market. The temporary waiver will give the required push to the South Delhi property market.
- GST Reduction on Key Raw Material:
- With project delays cost of interest going up and rupee weakening, Cost of projects will be going up. The Government should look at giving temporary relief by reducing GST / waving GST on key raw materials like Steel, Cement, Marble, Air Conditioners, Electrical and Plumbing accessories.
- It would be important to add that when one small 200 yards building to develop South Delhi floors gets constructed about 250 direct and indirect industries get attached to that one building.
- Work From Home (WFH) Policy:
- With companies like TCS announcing that work from home (WFH) will be a long term phenomenon, Many other South Delhi buyers and sellers would start WFH.
- SDMC (South Delhi Municipal Corporation ) and DDA Delhi Development Authority similar authorities should broaden the definition of professionals who can work from their apartments and homes and use 25% of their home as their small office home office (SOHO).
- Grant of ‘Industry’ status to Real Estate Sector
- Industry status will ensure Home Buyers a hassle-free loans at subsidized rates.
- It will make easier for developers to raise funds at lower rates reducing their cost of capital and thus positively impacting the overall project cost.
- It will serve as a major structural reform of Real Estate sector simplifying the approval process for residential projects and increasing transparency.
In these uncertain times, India has a golden opportunity to be optimistic if it wins in its fight against coronavirus. There will be a shift in global demand from China to India due to supply diversification by the international community leading to rising incomes. Indian real estate must look for positivity in the situation. As we have seen many deadly epidemics than COVID 19 and have successfully bounced back.
Southdelhiprime.com is a Digital Venture of SanD Advisory Pvt Ltd. is a boutique real estate advisory & transaction company, having advised the who’s who of South Delhi on their real estate assets. We have special expertise in high-value transactions & dispositions in South & Central Delhi. With over 500+ clients, we have done transactions worth millions. DoctorProperty.in, our online real estate research expert will respond to some of the common questions we’re receiving regarding buying a house during this pandemic.
