Residential real estate to recover by FY 2022-23

According to CRISIL, domestic ratings agency, India’s residential real estate sector is expected to reach the pre pandemic demand level only after FY 2022-23. Owing to improved affordability and increasing work from home needs, Bengaluru, Hyderabad, the National Capital Region (NCR), Kolkata, Pune and Mumbai, the top six markets, will collectively grow 5-10 % by area during FY 2021-22.

Pune and Mumbai are expected to witness contraction due to stamp duty cut-fuelled demand during FY 2020-21. “Demand in Bengaluru, Hyderabad, the National Capital Region (NCR) and Kolkata is set to rise 40-45 per cent this fiscal after plunging 25-45 per cent last fiscal, propelled by better affordability and lower base,” Isha Chaudhary, Director at CRISIL said.

The agency further added that the second wave is expected to affect demand in the first half of FY 2021-22, but recovery is expected in the second half of the year. In the top six cities, during the past five years affordability has improved by up to 30% in the six cities during the past five years owing to low interest rates, moderate price correction and reduction in stamp duty.