Feeling torn between investing and not investing in real estate during the COVID times? No worries.
CategoriesReal Estate Property, Real Estate

Feeling Torn Between Investing And Not Investing In Real Estate During The COVID Times? No worries.

Ever since COVID-19 has laid its foot on the Indian soil, several sectors of the economy have suffered a big blow, including the real estate industry.

Pre-Covid, the commercial property market witnessed exponential growth. But the global pandemic has led to a change in the consumer behavior. The crisis has made people realize that the security of owning a home is much better than the uncertainties of a rented accommodation. 

So if you are a home buyer who is fence-sitting if it is the right time to invest or not, then let us tell you that there has never been a better time in history to invest in a real estate property in Kolkata or any other metropolis.

Let us walk you through some full-proof reasons that support our claim. 

1. Home loan interest rates are at their lowest – The RBI has benevolently lowered the repo rate to 4%, which has resulted in the home loan interest rate being the lowest in history. But if you are an aspiring homebuyer, ensure that your credit score is over 750-800 to avail of the best home loan rates and enjoy low EMIs throughout the loan tenure. 

2. The scenario favors the demand side – On account of loss of jobs, delay in perks and promotions, and salary cuts, the personal finances of many individuals are at stake. So one out of every three buyers has either dropped the home buying plan or kept it on hold. Due to this, a wide variety of real estate properties in Kolkata and other major cities are available across all localities. So, with higher LTVs (Loan-to-Value ratio), lower property prices, and cheaper credit availability, the situation feels like a Godsend gift for the homebuyers.

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3. Lucrative schemes by the supplier side – Multiple lockdowns have caused the laborers to abandon the construction sites and flee to their towns and villages. It has caused the developers of real estate in Kolkata to revise their payment schemes and release attractive offers, subvention schemes, and discounts to drive sales. Some developers are also offering free cancellation, refund booking amounts, and cashback offers to buyers who intend to purchase during the lockdown. So if you have good negotiation skills, who knows, you may secure an attractive deal on your dream home.

4. The unconditional support of the Government: The Government has been quick to announce schemes to revive the real estate market. The Government has empowered the affordable housing segment by extending the Credit Linked Subsidy Scheme (CLSS) for the middle-income group up to March 2021 and has also opened a new investment class in the form of an affordable rental accommodation scheme for the migrant workers and urban poor. The pandemic-induced reverse migration will act as an impetus for the developers to expand their residential projects in Tier-2 and Tier-3 cities. Furthermore, the PMAY and the Nijashree Scheme introduced by the joined efforts of the Central and the State Government of West Bengal have accentuated the value of the concept of affordable real estate properties in Kolkata for all. 

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The Final Verdict

With the Indian Government preparing for mass vaccination and the resumption of normalcy, the real estate market is expected to bounce back with renewed vigor.

We strongly believe that now is a good time to invest in real estate, irrespective of whether you want to acquire a new property for self-use or increasing your wealth in the long term. But keep in mind that real estate is not a get-rich-quick game. 

If you have the intent and liquidity to take a financial step, you must move forward cautiously.  No matter what type of investment property you decide to put your money on, you must never underestimate the expertise of an experienced and knowledgeable real estate consultant. You can turn to us at PropShala for any property-related questions, and we promise to answer them as quickly and accurately as humanly possible.

This Is How COVID-19 Has Impacted The Real Estate Market Of India
CategoriesReal Estate

This Is How COVID-19 Has Impacted The Real Estate Market Of India – A Must-Read

After the nation was hit by the first wave of COVID-19, just when it seemed that the revival of the real estate sector was not far, the country was hit by the second wave of Coronavirus in a more deadly form.

So, without delay, let us look at how COVID -19 has affected the scenario of Indian Real Estate.

The positive impact of COVID -19 on the Indian Real Estate Sector is–

Home affordability has increased – While RBI has kept its repo rate unchanged at 4%, softening of home loan rates to as low as 6.65% annual interest has been a driving force to re-engage buyers in the real estate market. This is in contrast to the average home loan interest rate of 8% in January 2020, which is a big relief for existing buyers who have to cope with job loss and wage cuts yet manage their EMIs. Moreover, low property prices coupled with attractive offers from cash-strapped developers have helped boost demand for residential property.

Digital Adoption by Real Estate Industry – In an effort to recover from the blow of the pandemic, real estate agents have turned their attention away from traditional approaches and started using digital business strategies to market their properties or launch new projects. With no physical tours available during the lockdown, buyers are discovering new homes using virtual tours, drone footage, video calls, etc.

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The Negative Impact of COVID -19 at Indian Real Estate Sector is –

A near-stop situation for construction activities – With the imposition of international trade restrictions due to COVID -19, India’s availability of manufacturing materials and equipment has suffered a huge setback as China happens to be our nation’s main supplier. To make matters worse, workers from many under construction sites have returned to their hometowns. Both of these factors have negatively impacted the scheduled delivery of real estate projects, causing them to be delayed by at least 4 to 6 months. It has also increased the overall costs for the developers.

Reduced demand for business premises – With the intention of curbing the spread of Coronavirus infection, businesses had no choice but to announce remote working for practical and safety reasons. Thus, work-from-home culture became the new normal. But the concept of remote working has proved detrimental to the growth of office space rental companies, as businesses and co-working providers further shelved their expansion plans in the wake of the pandemic. It has been reported that net office space leasing has declined to about 35 lakh sq ft in Jan-Mar 2021 from about 70 lakh sq ft in the corresponding period of 2020.

What does the future look like for the Indian Real Estate in 2021?

It was expected that 2021 would be the year of recovery for Indian Real Estate Market. However, the recent lockdowns and restrictions on construction activities have forced investors to maintain a cautious mode. However, once the situation is under control and the rate of infection is brought down, the enthusiasm of buyers to own a flat/house will skyrocket as people have realized over time the importance of the sense of security that owning a house brings. But the pace of revival of the real estate sector will depend solely on how India deals with the second wave of the deadly pandemic.

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Final reflection

There is no denying the fact that COVID -19 has adversely affected numerous sectors of the economy, including the Indian real estate market.

However, if you are a financially stable investor, you should take advantage of the recently lowered interest rates on home loans to make a valuable investment in a real estate property in Kolkata.