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India GDP data | Real estate sector contracts due to COVID-19 impact in FY21

May 31, 2021 07:18 PM IST

The construction sector saw a 14.5 percent growth in Q4 on a year-on-year basis. This reflects a significant proportion of the government's investment in infrastructure projects. The financial, real estate and professional services sector saw a growth of 5.4 percent in Q4 on a year-on-year basis.

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The construction and financial, and real estate and professional services sectors have shown a negative growth of 8.6 percent and 1.5 percent respectively between April 2020 and March 2021 due the impact of COVID-19, official data released by the National Statistical Office (NSO) showed on May 31.

However, in Q3 and Q4 construction witnessed a rebound before the second wave of COVID-19. The construction sector saw a 14.5 percent growth in Q4 on a year-on-year basis.  This reflects a significant proportion of the government's investment in infrastructure projects.

The financial, real estate and professional services sector saw a growth of 5.4 percent in Q4 on a year-on-year basis.

“The overall GDP growth numbers at -7.3 percent are on expected lines. In terms of the construction and financial, real estate and professional services sector, it is heartening to see the sectors rebounding in the third and fourth quarters. However, the overall annual growth has remained in the negative zone because of the impact of the first wave in the first and second quarters,” Samantak Das,  chief economist and head of research, India at JLL.

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Going forward, it is important to watch the impact of the second wave on the two sectors, he added.

"The decline in GVA in construction and real estate activity was largely due to COVID-19 and along the expected lines. This is mainly because during the first wave in 2020 (since April), there was at least 75 percent drop in construction activity across the country. Developers remained more focussed on selling their ready stock rather than launching new projects," said Anuj Puri, chairman, ANAROCK Property Consultants.