Commodity prices staggering can reverse growth in real estate

The pandemic induced economic lockdown brought Indian economy to a grinding halt wherein Indian Real Estate was badly affected. However with a series of economic and policy reforms introduced by the central government, India saw in the last quarter of FY 19-20 a positive recovery trend. Moreover, the Centre’s infrastructure push shows a pick-up in real-estate demand and industry consolidation that have helped drive pan-India cement prices by around 4% in the first week of March. But the demand remained firm as continued traction in infrastructure building; affordable housing and rural consumption drove volumes.

Nevertheless, the only sector that is still performing is affordable housing as it is an end-user driven market, the constant low prices and low home loan interest rates are inspiring home-buyers to make their purchase decisions. Considering the central government’s dedication towards affordable housing, the future for affordable housing is still positive as in the coming months, there will be more rise in demand and supple.

Mr Pradeep Aggarwal, Founder & Chairman, Signature Global Group, Chairman, ASSOCHAM, National Council on Real Estate, Housing and Urban Development, says, “Raw materials like cement are an essential commodity for the real estate sector, any kind of price hike in this segment can reverse the effect of government’s push to elevate the stature of sector from the reeling effects of pandemic. Talking of other segments, people with a good track record of deliveries are not facing problem as they have already rationalized prices looking at the market condition. Attracting buyers through discounts and schemes in various forms by the developers is not successful either as the buyer can distinguish among variety rationally and will only go for projects that fulfill their needs. Overall the real estate demand has risen but only good projects are getting the buyers’ attention.”

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