Localized Lockdowns Accelerated Real Estate Growth

While the country did witness a devastating second wave during the April-June 2021 quarter, the lockdowns were more localised, which didn’t make the economic activities to come to a standstill. The current numbers denotes that the Indian economy is on its way to recovery after previous year. The construction sector has witnessed a 68% growth over the same period last year, which computes to 85% of the overall gross value addition of pre-pandemic level of 2019.

Due to limited restrictions on construction during the second wave, construction continued even at a relatively lower level and therefore, growth of 68.3% could have been achieved. The number stood at -49.5% last year due to the complete lockdown following the first wave.

Financial, real estate and professional services improved by 3.7% over the same period last year. Although, in terms of gross value addition, the financial, real estate and professional services sector has managed to achieve almost the pre-pandemic level by 98.5%.

The construction, financial, real estate and professional services sectors have clocked a growth of 68.3% & 3.7% percent respectively between April to June FY 2022 due to localised lockdowns across states and most businesses functioning partially.

Additionally, boosted by a low base effect, India's construction sector posted a 68.3% growth in the first quarter (April-June) of FY22 (2021-22) despite the second wave of the COVID-19 pandemic hitting the country. Construction sector’s gross value added stood at Rs. 2.21 lakh crore in Q1 FY 22. It was Rs. 1.31 lakh crore during the same period last year and Rs. 2.60 lakh crore during the pre-pandemic period.

In comparison to the pre-pandemic quarter of 2019, the value addition from the construction sector reached at Rs. 2.21 lakh crore compared to Rs. 2.26 lakh crore in the first quarter of 2019 translating to a 85% gross value addition of the pre-pandemic level.

The growth in the construction sector will be led by constant demand in the residential sector helped by increased affordability of residential properties. Moreover, the ongoing vaccination drive is being held at a fast pace, which will help in infusing optimism in the market. 

Source : National Statistical Office (NSO), official data released on August 31.

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