This blogpost is brought to you by Vasu Jain, property consultant at Subh homes
The outbreak of novel corona-virus has had heavy emotional, physical and financial repercussions on a significantly large number of people across the world. With media and daily updates perpetuating the havoc, it is easy to give in to the panic.
Most sources of information around us today have led us to believe that the looming economic instability will put a majority of the world’s population through an insurmountable financial crisis. However, through my personal insights as well as research analysis, I wish to provide a balanced and refreshing perspective to the situation in commercial terms, and showcase evidence of how better times lie ahead for all of us.
Through this blog post, I will attempt to address a multitude of factors which contribute towards making real estate a desirable investment in the near future.
Given the tangibility of the affairs involved in a real estate deal, residential and commercial alike, project delays are speculated even after the lift of lockdown. Some experts estimate that this lag could go on for around 7-8 months given both the unpredictability of the elimination of the virus as well as labor returning to work.
Despite the disheartening news updates with each passing day, my projection towards the real estate market post pandemic remains optimistic. Economists are hopeful that India is likely to witness the emergence of a diverse and resilient economy which will attract global manufacturers and boost its overall economic growth post lockdown. Consequently, research on future trends suggest that we can expect a prosperous period for the real estate market in the second half of this year.
Reduced home loan rates likely to make buying residential properties a desirable investment
Owing to a natural boost of demand coupled with government measures such as the strong plausibility of banks providing larger loans at relatively cheaper interest rates, as well as RBI’s announcement to reduce repo rates to 4.4%, further bringing down the home loan rates to as low as 7.25%, it is highly likely that the real estate market will witness a boost which will prove to be beneficial for both buyers and sellers alike.
The world that will emerge before our eyes as we step out of quarantine is going to be drastically different from how we left it. The underlying implication is that, challenging times like these call for a variety of coping, and adapting mechanisms. Developing on that, TCS, India’s largest IT firm, has announced that 75% of its workforce will work from home by 2025, and many other businesses are speculated to follow suit. This will result in increased demand for residential properties, projected to increase upto 20%, especially for 3Bhk and larger units.
Countries such as America and Canada are experiencing the worst hit of this pandemic, as such it is also foreseen that a significant number of NRI’s might return to India, further increasing the demand for luxury homes.
This is not to say that the spike in demand should worry a buyer about unreasonable prices of properties. There may be a slight increase, due to an increased cost of production on the developer’s end, especially of raw materials like iron and steel, but not by a large margin, as current market trends suggest.
Lastly, as we all tread towards this new era where virtual spaces gradually begin to replace the physical ones, the usage of technology will grow at an astronomical rate. Clients will rely on digital inspection tours and most forms and registration will shift to online portals. Yet in times like these, more than ever, we now realise the importance and advantage of living in homes owned by us.
In view of all the speculation discussed above, it is my informed opinion that the world post lockdown might be a challenging one, but there is also a silver lining wherein many opportunities lie ahead, for both buyers and sellers, just waiting to be seized.