Annuj Goel talks about Covid impact on India’s real estate
In India, the second wave of Coronavirus is badly affecting the business of almost every sector. People had no idea Covid-19 will return in such a drastic new form and kill such large numbers of people. Lockdowns imposed across many states and districts have caused businesses to bear the brunt of the pandemic and suffer incredible losses.
As soon as the first wave of Coronavirus hit India, experts predicted that real estate would be one of the hardest hit sectors since lockdown was imposed to curb the spread of the disease, thus construction work also slowed down. Another factor was the mass exodus of workers from large cities, such as Delhi and Mumbai. In contrast to expectations and predictions by realty experts, booking of apartments increased in many states and cities.
In light of the second wave, the million-dollar question in terms of real estate again arises – how will the resurgent Coronavirus affect home prices across the country?
Based on the trend seen in the real estate sector during the first wave of Coronavirus in India in 2020, prices in the real estate domain will see an upward trend for its own reasons.
Work from home
With the increase in Coronavirus cases, most firms have decided to work from home in order to curtail the spread of the pandemic and save as many lives as possible. Increasingly, people are working from home, so they require an additional room to complete their tasks peacefully. Consequently, people are becoming more inclined to buy properties in which at least one room is dedicated to office work.
Spending more and more time with family
Since many people are working from home, they have more time to spend with their families, which means more time at home. Additionally, this will induce a demand for bigger and more luxurious houses/flats that will let people spend more quality time with their family and friends.
Actual buyers: For residence, not investment
In the past few years, there has been a surge in demand for flats that are intended for actual living purposes, not just for investments or appreciation of property value. Due to this trend, a further surge in the real estate market is expected.
Low home loan interest rates
There are now record low interest rates on home loans offered by most of the banks. Since bank offers on home loans are attractive, home buyers should take advantage of this offer.
There have been a number of new realty projects released in the first quarter of 2021 (January-March 2021). In addition, the report shows that homebuyers’ demand has risen compared to the previous quarter. Private equity investment inflows into the Indian real estate sector totaled USD 1.9 billion (INR 135 billion) in Q1 2021, according to a recent study. Despite the Covid-19 pandemic-related slowdown, real estate buyers are regaining confidence. In the first quarter of 2021, investment inflows are already nearly a third of what they were in the entire year of 2020.
As a result of the current surge in Covid-19 cases, various state governments are left with no other option than curfew or partial lockdown. However, once the cases begin to drop, the situation will be under control soon, and the real estate market will flourish even more. Lockdowns and curfews definitely affect the real estate market, but this sector is known for making incredible comebacks, as it did last year when Coronavirus cases began to decline.
Prices are likely to rise in the real estate sector, especially for projects by reputed builders known for delivering inventories on time. Demand and supply follow a simple rule. Due to increasing demand from the actual homebuyers – work from home, low home loan interest rates, more time with family, to name a few – prices too in the real estate sector are expected to rise.