The capital crunch among a weak economy turned out to be the biggest bane of real estate sector. Facing severe headwinds due to weak non-supporting economy and liquidity crisis, the real estate sector’s overall performance was below expectations in 2019. With the prevailing crisis in the NBFC and banking sector, the developers were starved of funds to either complete a large number of stalled projects with lakhs of incomplete units or launch new projects.
The end-user driven residential market, despite all odds, was set on the path of recovery. This was clearly evident from the pick-up in housing launches and sales. There was 18-20 per cent annual growth in home launches while home sales showed noteworthy growth.
In the residential sector, affordable housing was the dominant theme and it turned out to be a saviour for the residential sector. The rise of affordable housing was made possible due to favourable policies of the government. Thanks to favourable policies, the affordable housing sales gained traction.
Notwithstanding the prevailing low sentiment, the year 2020 heralds’ hope of positive results due to policy measures initiated to revive realty. The deployment of Rs 25,000 crore Stressed Asset Fund created by the Centre to complete lakhs of stalled housing units will unlock huge value, creating fresh demand and supply, in turn catalysing the process of recovery.