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Real estate developers’ apex body CREDAI (Confederation of Real Estate Developers’ Associations of India) does not see an “immediate impact” of the Omicron Covid variant on property bookings.
Costs may increase
While the cost of apartments are expected to see a 5 - 10 per cent rise, at the end-user level, primarily to off-set a similar or “more than that” hike in raw material cost; bookings of existing properties or launch of new ones are unlikely to see an immediate adverse effect.
Also see: CREDAI advises home buyers to purchase only in RERA-registered projects
“The long term impact of Omicron is yet to be ascertained. But, as of now, we do not foresee a slowdown in bookings or new property launches because of the variant. The festive momentum is expected to continue for quite some time now,” Harsh Vardhan Patodia, President, CREDAI, said.
Patodia added that property bookings have been at pre-Covid levels despite “possibility of an increase at the end-user levels”. Micro-market fluctuations could see a higher (than 5-10 per cent) price rise for buyers.
Sales likely to rise
Property consultants Knight Frank India had recently said that despite the strong second wave of the Covid pandemic, property sales were likely to increase over the 2020 level this calendar year driven by pent-up demand, festive sales, gradual recovery of India’s economy, stronger employment market and low home loan interest rates.
On Friday, the S&P BSE Realty index crossed the 4000 mark. The index — which covers companies like DLF, Oberoi Realty, Sobha Developers and Godrej Properties among others — closed at 4,081, up 2.90 per cent.
Durable market
Sharad Agrawal, Executive Director - Capital Markets, Knight Frank India, said the property market seems to have a clear sense that the real estate cycle, which witnessed a turn from the festive season, is a durable one. And that it will continue for some quarters.
“We expect the demand to become broad-based as the cycle progresses. We are also witnessing pricing power come back in the property developers’ hands combined with strong volumes. This has led to a re-rating of the sector which is driving the realty index,” Agrawal said.
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