The Omicron Covid variant will not have an immediate impact on the real estate market: CREDAI
The umbrella body of real estate developers CREDAI (Confederation of Real Estate Developers’ Associations of India) does not see an “immediate impact” of the Omicron Covid variant on real estate bookings.
Costs can increase
While the cost of apartments is expected to increase by 5-10%, at the end-user level, mainly to compensate for a similar or “more than that” increase in the cost of raw materials; reservations of existing properties or the launch of new ones should not have an immediate negative effect.
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“The long-term impact of Omicron has not yet been determined. But, for now, we don’t anticipate a slowdown in bookings or new property launches because of the variant. The festive momentum should continue for some time now, ”said Harsh Vardhan Patodia, President of CREDAI.
Patodia added that property bookings were at pre-Covid levels despite “the possibility of an increase at the end-user level.” Fluctuations in the micro-market could result in higher prices (5-10%) for buyers.
Sales are expected to increase
Real estate consultants Knight Frank India had recently said that despite the strong second wave of the Covid pandemic, real estate sales are expected to increase from 2020 levels this calendar year, driven by pent-up demand, festive sales, the gradual recovery of Indian economy, strengthening employment market and low mortgage interest rates.
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On Friday, the S&P BSE Realty index broke the 4,000 mark. The index, which covers companies like DLF, Oberoi Realty, Sobha Developers and Godrej Properties, among others, closed at 4,081, up 2.90 %.
Sharad Agrawal, Executive Director – Capital Markets, Knight Frank India, said the real estate market seems to have a clear sense that the real estate cycle, which has taken a turn after the holiday season, is sustainable. And that this will continue for a few quarters.
“We expect demand to become widespread as the cycle progresses. We are also witnessing a return of pricing power in the hands of property developers combined with high volumes. This has led to a reassessment of the sector that is behind the real estate index, ”Agrawal said.