How this pandemic can open new doors for you, literally!
April 8th, 2021
The Covid-19 pandemic has raised concerns on almost everything: our lives, livelihoods, holiday plans, school lessons, and even something as basic as a handshake. If you were thinking of buying a house, 2020 was supposed to be the year of opportunity for you. After slumps in the sector due to demonetization, financial distress, GST implementation, etc., the real estate sector made a fresh start at the beginning of 2020. Renewed confidence of buyers and increased demand for affordable housing drove this trend. But things went downhill as soon as the lockdown hit, all those demands going unfulfilled.
As we slowly adapt to ‘Namaste’ over the handshake and words like lockdown, social distancing, work-from-home enter our new normal, the year 2021 brings some rays of hope. The government has rolled out the Covid-19 vaccine. The government is helping the economy with recovery packages. Even people’s travel plans are rolling out. Things seem to be stabilizing. As for the real estate sector, the recovery after the global pandemic is a golden opportunity for potential buyers. It has opened new doors for buyers to take advantage of the opportunities the market offers, making it more favorable for buyers than ever!
- Purchase Incentives: RBI has announced several interest rate cuts to boost credit flow into the economy, with the repo rate lowered by 115 basis points since March 2020. Repo Rate refers to the interest rate at which banks borrow money from the RBI, and if this rate falls, as is the case above, then the banks bring down their lending rate. That means cheaper loans for you! Right now, real estate buyers can get bank loans for as low as 6.68% interest rates, compared to 8% in 2020. SBI has lowered its home loans up to rupees seventy-five lakhs to a record low of 6.7% as of March 2021.
- Cheaper mortgages: Bankers have traditionally favored collateral assets that are secure over the unsecured. Banks are known to put in action some of the strictest norms for mortgages for home loans. Now, to counter the economic downturn, banks are offering cheaper mortgages because of RBI interventions. So if you are looking to buy a new house, these relaxed norms can help you save thousands of rupees on your mortgage loan. This opportunity makes 2021 the perfect time for potential home buyers.
- Stagnant Price Growth: The growth in prices in the housing sector stagnated due to low demand. Potential buyers can take advantage of this price stalemate to book properties at more affordable prices.
- Government Support to the Sector: As an economic relief package, the Indian government had relaxed norms for projects, extended tax holidays for affordable housing projects, and announced measures to revive the transport sector that indirectly benefits the real estate sector. These measures will help the real estate sector fast-track its construction. It will instill confidence in potential buyers to invest in their own house at more affordable prices.
- Opportunity for NRI buyers: The pandemic has created an investment opportunity for NRIs in the Indian market as real estate in foreign countries was harshly hit by the pandemic. Also, the value of the rupee against the dollar fell. Although this adversely impacted the domestic market, it proved beneficial for NRIs to invest in Indian markets at more competitive prices.
- Adapting to the new Normal: As work from home becomes the norm, people are showing interest in upgrading their houses to make it friendlier for remote work. Developers are now showing home variants with work from home facilities, more spacious floor spaces, etc. They are rolling out precautionary measures in their customer services, like face masks, temperature screening, sanitizing the premises, e-marketing, etc. So you don’t have to worry about the concerns that have crept into your minds post the pandemic.
- Role of Technology: Developers are making it easier for buyers to look into properties with the increased digitization of real estate. Technology plays a central role in house hunting and accessing bank loans with features like drone tours, virtual tours, video communications, online registration facilities, online banking, etc.
The post-pandemic rise in home affordability is related to the recovery of the real estate market. Maharashtra and Karnataka governments levied lower stamp duties in real estate. Amid all these incentives, cities are witnessing robust sales of home properties. People faced many difficulties during the pandemic. Job insecurity, economic uncertainty, and high rents have made people realize the value of owning a home. Therefore, more buyers who earlier might have been wary of investing in real estate are taking up conscious decisions to buy properties while the opportunities are still present. If this was the sign you were waiting for to put your money in the dream house of yours, then you should go for it!