The Indian economy has been through a severe and a prolonged slowdown in 2019 and real estate remained a key element in it. However, according to an Anarock report affordable housing and commercial office spaces remained in demand compared to the other realty segments during the year.
"Affordable housing remained upbeat in 2019 thanks to multiple government sops throughout the year. First-time home buyers were given further tax deductions (now amounting to Rs 3.5 lakh in a year) on interest amount of home loans below Rs 45 lakhs availed within FY2020 end," it said.
Luxury and ultra-luxury segments remained limited to end-user interest, with "no serious investor activity", said the report by Anarock Property Consultants on Thursday.
For the housing sector, the only light at the end of the dark financial black hole was the announcement of the alternative investment fund (AIF) of Rs 25,000 crore to facilitate the completion of stuck affordable and mid-segment homes, it added.
Further, average housing prices in 2019 maintained status quo across the top seven cities, with a just 1% yearly gain in Mumbai Metropolitan Region, Pune, Bengaluru and Hyderabad. The National Captial Region and Chennai saw no change at all, while Kolkata saw a 1 per cent decline in 2019.
The report noted that the commercial office real estate flourished and remained the top-ranking real estate asset class during the year as residential continued to struggle under the funding crunch and slow annual sales growth.
Other asset classes like co-working, logistics and warehousing, co-living and student housing gained traction in 2019, attracting slow but steady investments, collectively $210 million.
"India's office real estate sector was decidedly vibrant in 2019, with demand for Grade A office space spiralling upward while vacancy levels in prime locales reduced."