Post Second Wave Effects on Real Estate Market
With the second COVID wave hitting its peak in India, we can’t seem to control the number of cases around the country. Every industry has suffered an irrecoverable blow to the knees as the economy has again come to a standstill with an ever longing lockdown.
Real estate picked up pace after the dust settled post-first wave in 2020. And, as rightly predicted, the demands, post lockdown are again going to rise & so are the per ticket prices. Read on to know why the real estate market is going to pick up and show a rise as the nation sees the worst economic health in comparison with the last couple of decades.
- Remote Home Working
A brand new global research report by Lenovo has revealed that 74% of the respondents in India agree they will continue to work from home more than they did before the COVID-19 pandemic.
Remote working will be on the rise due to people wanting more comfortable homes to make personal home office spaces. Tier 2 & tier 3 cities will show improvement in demands for such units, as companies are allowing work from home now and the employees who have just gone back to their respective places wouldn’t want to leave the comfort of their native city at any cost.
- Low home loan rates - Homebuyers are currently getting home loans for as low as 6.65% annual interest, despite the RBI’s commands to keep the repo rate unchanged. In January 2020, the average home loan interest rate was upto 8%, which is a significant difference.
Home loan interest rates are currently at a record 15-year low. With demands declining due to COVID, along with people losing jobs, suffering unimaginable losses in business; banks cannot push home loans to citizens at an inflated interest rate. The revised rate of home loan is much lesser as the banks and financial institutions don’t want defaulters & they will not be able to deal with bad debts if it goes south.
- Continued government support for the REIT sector is also expected. Real estate’s contribution to Indian GDP is expected to reach 13% by 2025. REITs to become operational is the new trend. Post covid will return more than the investment. People will not be able to take all the risk single-handedly post COVID which is when they will opt for shared risk option in real estate. With REIT as an option for investment on the rise; people in control of their real estate investment more than ever will spread the word & more part-ticket investors/ micro-investors will put their resources into some REIT action.
- Availability of almost ready inventory will be the first batch of units to get sold out to the customers. The ready-to-go flats, duplexes, bungalows & other properties will have the first shot of getting price-negotiated and sold. With people coming in with sorted financial plans to buy out, the ready possession units will sell like a piece of cake.
- Digitization will pick up the real estate's pace and will get it out of the slump which COVID19 has put real estate in. With more and more digital access to customers with 360 Degree Video and actual walkthroughs of properties, it will be easier for the developers and brokers to close the deals. As and when the first few get sold out, reviews and feedbacks online will take over the selling altogether.
It can also work for and against the real estate industry as we don’t know for how long the lockdown is going to last. Many cities are given the permission of being partially accessed by the residents but the fear of the unknown still remains and doubts fill the minds of the governance, whether the third wave is just around the corner or have we controlled it all. Anyway, Real Estate will never fall short of demand or either supply. For now, the predictions are quite potent & you can plan your home buying or real estate investing basis these.