Will the second half of 2020 make a good time for investment in Luxury Properties?

April 17th, 2020


The outbreak of a global pandemic has completely changed the landscape of all the industries and businesses, and real estate is no exception.
Due to the disruption and complete lockdown of the entire manufacturing sector across the globe, loss of labor, and overall financial instability, the real-estate has come to a grinding halt as of now.

However, the second half of 2020 is likely to see a positive surge in the number of sales. The recovery for the sector will provide a great time and opportunity to invest in luxury properties.

The second half of 2020 will see a significant amount of traction for the real estate sector, and especially for luxury properties as the global pandemic has brought in a paradigm shift in the work patterns across all industries. However, due to several other market factors and financial forces, the prices are likely to remain stagnant or possibly decrease, making it a great time for investments

Here, in this blog, we will explore the details of real-estate investments in India for 2020 and try to figure out the answer to the crucial question of, “Should I invest in luxury properties in the year 2020?”

Need for Evolved Residential Units:

With this new shift in work pattern, it’s important to have a space that both motivates and provides a feeling of comfort while working from home Residential units, post the pandemic will need to cater to the acquired need for houses to serve as a multi-functional abode, which offers a perfect blend of serenity, picturesque exteriors, and extremely comfortable interiors. Increasing demand for remote working options is likely to discourage investments in office spaces as more and more companies are switching to work from home options for all their employees. Therefore, it would be in the interest of urban dwellers to invest in luxury properties as they will serve the need for an evolved residential unit. The market forces combined with the skewed supply and demand ratio would make the second half of 2020 a great time to invest in luxury properties.

The Demand and Supply Equilibrium

Due to the uncertainty surrounding the current situation and its aftermath, the majority of the buyers are likely to defer their purchase plans in the first and second quarter of 2020.

This is likely to result in a disproportionate supply to demand ratio, leading to a fall in the prices of real estate. A number of finished and unfinished projects due to a liquidity crunch and the overall economic downturn are likely to be sold at lower prices.
This brings us to the conclusion that much like any other aspect and offering of the real-estate the luxury properties will see a decline in demand, thereby making it one of the best times to invest.

The Price Imbalance:

According to most real-estate developers and domain experts, the real estate prices would largely remain stagnant, but the development costs might go up owing to an increase in the prices of raw materials.

Developers are expecting the cost of raw materials to increase significantly. India imports steel, plastic, iron products, fiber, and several other pieces of equipment from China and other neighboring countries. Therefore, the complete disruption of manufacturing processes across the globe will lead to a rise in the process of all the products. However, due to the current scenario and liquidity crunch in the Indian market, these increased prices cannot be factored into the cost since the consumer will be extremely sensitive to any price increase. This is most likely to either decrease or freeze the price of luxury properties. Either of these scenarios would make investments in luxury properties a great idea. Since the prices of real estate will likely double in early 2021, thereby making today’s investment in luxury properties a huge success.

These are some insights to help you invest in luxury properties in the second half of 2020. The second and third quarter of 2020 will be a great time for investment in this sector and pave the way for the possession of a long-term and lucrative investment option.

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