With the lockdown easing, many industries will resume activities with adequate social distancing. There is an apprehension about how things will unfold.
By Gaurav Sawhney
With the lockdown easing, many industries will resume activities with adequate social distancing. There
is an apprehension about how things will unfold. However, every crisis presents us with opportunities to think out of the box, survive and thrive and Covid-19 is no different. If you ever harbored an aspiration to buy your own home but could not afford to, now is the time to re-evaluate your options. In the past 5-6 years, the real estate industry has been witnessing consolidation due to multiple reforms by the government. Real estate has been a preferred asset class for customers, as it offers numerous benefits.
It was always safe to buy from reputed developers and in the current scenario one should continue to search for the best available options to safeguard their investments.
Here are some of the reasons why it is conducive to invest in residential real estate during these times.
Sense of security: With uncertainties all around, people are seeking a sense of security. A recent report by Anarock Group suggests that 92% of the respondents would like to have a physical asset during these times. While physical assets might not yield immediate returns, it is less volatile during these times. It is a perfect investment in the current situation, where work from home is gaining prominence and individual safety is of prime importance.
Performance over other Assets: During these trying times, when scenarios are uncertain, residential real estate is the safest investment option as it offers maximum stability. After the stock market crash, people do not want to risk their money in volatile instruments. Fixed income options are not looking very attractive even after a flurry of rate cuts. Higher returns could be expected once the economy starts recovering, which certainly makes this a perfect time for customers to invest in their dream homes.
Availability of exciting Offers: Developers are also offering exciting schemes and relaxed payment options to make it easy for homebuyers to invest in their dream homes. A combination of exciting offers and lower interest rates would make investing in residential properties advantageous.
Conducive Home Loan Rates: Prices of residential properties have mostly remained stagnant in the last 5-6 years across India, making them within the reach of customers. The current market conditions are conducive for home buying as the home loan interest rates are at an all-time low. A decrease in home loan interest rates post COVID has become a big trigger for end-users to buy a home. In addition to that, RBI has recently announced reduction in REPO rate which makes home loans even less expensive. This is a welcome move as more and more investments will boost the sector and increase cash flows. The current situation is such where the Indian rupee is depreciating against other currencies making Indian properties a lot more attractive for NRIs.
Growth in Value Housing segment: The residential sector is all set to embark on a different growth trajectory with ‘home ownership’ gaining significant preference among the new-age millennials. Covid-19 has not dented the demand for homes that offer value for money. A recent report also shows that millennials prefer value in terms of buying property with around 75 percent of them aspiring to buy a home in the next three years. Efficiently designed homes have become popular amongst millennials and young couples, as they are a good first investment, offer sense of security with aspirational amenities.
Leveraging PropTech: The real estate industry will evolve and adapt to ‘the new normal’ through digital transformation. Many developers are experimenting with newer technologies to improve the experience of their customers. They can now seamlessly experience an intuitive journey: from awareness to purchase on the company website from the comfort of their homes. For buyer’s convenience, developers have started to create hassle-free digital platforms to buy a home without the need to visit the actual site. Everything is moving online, search and discovery is easy, as apartments can be booked online. State-of-the-art AR/ VR tools also allow homebuyers to take a virtual tour of the topographical aspects to make informed decisions.
These efforts by the developers establish trust between them and their customers, which motivates and encourages them to make a purchase. We have a positive outlook for residential real estate post-Covid-19 with more people buying homes. However, people who want to buy a home should be aware about the trends around the industry such as Repo rates, RERA policy and Tax rules etc. Thus, if one’s income is secure one should take advantage of the situation and consider an investment in property at this time.
- Gaurav Sawhney is President Sales and Marketing, Piramal Realty. Views expressed are the author’s own.