India's property market is recovering but it needs a helping hand

Cheaper mortgages, lower stamp duties and sweetened deals from developers are helping the sector to recover from the pandemic-induced slump

T9G6BW View of Bandra Worli Sealink bridge, Mumbai, India. Image shot 04/2019. Exact date unknown. Alamy

India's residential property market is showing signs of a recovery amid low borrowing costs, reduced duties and attractive offers from developers, but the sector needs more government support to overcome the impact of the Covid-19 pandemic.

“Government support in terms of reduction of stamp duty and historic low interest rates have set the sales momentum with end-users making the most of this opportunity,” says Manju Yagnik, vice chairperson at Nahar Group, a Mumbai developer.

“We expect a good 2021 in terms of new project launches, sales ... [more people] becoming homeowners for the first time, and the industry achieving some sort of stability.”

India's property sector, the second-biggest employer after the agriculture sector, will account for about 13 per cent of the country's gross domestic product by 2025, according to data from India Brand Equity Foundation.

The industry, which was struggling even before the pandemic due to liquidity issues and weak sales amid a slowing economy, was hit hard as construction came to a grinding halt for several months at the peak of India's strict Covid-19 lockdown last year.

Unemployment in Asia's third-largest economy climbed and GDP nose-dived, drying up the pipeline of potential customers.

However, as India's economy recovers, property demand is picking up. The revival is being led by the country's financial ca