The more than expected pick up in economy and subsequent improvement in job scenario, bodes well for the real estate sector .
There was unexpected pace of improvement in the economy in the September quarter of the current financial year. As such, the RBI revised its growth forecast of economy for current financial year to -7.5% from -9.5%.What is really encouraging is that 60% of RBI’s high frequency indicators including cement & steel in construction sector ,are above pre-covid level .Business activity has risen for the second month in a row during November. India Business Activity Index posted above the critical 50 mark that separates growth from contraction, consecutively for October & November months. In view of this Finance Ministry expects economy to perform better in the third quarter. Niti Aayog has said that by end Fy 22, economy will reach at pre-covid levels. In view of this, hiring/employment sentiment is also expected to improve in January- March quarter According to government, two dozen industries including allied sector industries of aluminium, glass, ceramics, can add 30m jobs. Retail sector, especially retail with expected growth of 25%, is expected to drive employment. Pandemic retail push 3 lakh temporary delivery, supply chain jobs. According to TeamLease, up to 20% of these temporary jobs are going to be extended/renewed going into 2021. Freelance earnings, according to Flexing It, a platform for providing skill talent on demand, have returned to pre-covid level in third quarter.
Says Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global and Chairman, Assocham National Council on Real Estate, Housing & Urban Development, ” Economy is the key to real estate growth. In June quarter, following the rapid spread of Coronavirus and lockdown, economy was massively hit. As a result of that both residential and commercial real estate got a crippling blow. However, with rapid improvement in economy in September quarter, real estate also got a boost. Especially the festive season boosted residential sales, driven largely by affordable housing. And now with encouraging projections for economy and employment for the next quarter, real estate recovery will get further expedited”.