You may have read articles regarding how this is the best time to buy a property amid COVID-19 buy one needs to be aware of various factors before that.
You may have read various articles telling you how it is the best time to buy a property as the home loan rates are lowest and developers are offering discounts and freebies etc, but to buy a property one needs to consider various factors, especially in the current scenario of Coronavirus pandemic which halted the whole world.
Job losses due to COVID-19 in India
Simply from the perspective of affordability, this might be the best ideal opportunity to buy a property. Yet, as per the Center for Monitoring India Economy, 50 lakh salaried representatives lost their jobs in India, in the period of July 2020, as a result of the Coronavirus-incited monetary burdens. Though, salaried jobs are not lost commonly, says the CMIE, when lost, they are additionally undeniably harder to recover. This implies all idealistic forecasts on the recovery of the economy and the employment market, for the time being, could be excluded.
These job losses have also impacted the stock market. The BSE Sensex dropped 1,115 points on September 24, 2020, or 3 percent, to end at 36.554, its lowest close since July 10, and the largest decline since May 18, 2020. It was the product of the US Federal Reserve vice-chair Richard Clarida’s statement ‘deep hole of joblessness and weak demand’. The Sensex reported its biggest single-day fall in four months as a result of his comment.
Buyers need to remain vigilant in such a situation. Your work might not be reluctant to risks. More significantly, it may be a hard challenge to find another job that fits your profile and remuneration.
The decline in Property Prices in India
Suddenly, purchasing a property in India has become much affordable than it probably was in the past few years. Prior to that, properties were so overpriced and the developer class so widely misused their dominant role that investors were left with no choice but to follow an impermeable approach to real estate.
While real estate continues to remain the country’s most desired investment, buyers remain somewhat hesitant. As indicated by the most recent information, 19,865 new units were launched across India’s eight markets while an aggregate of 35,132 homes was sold between July and September 2020, when the Government began the staged opening of the economy, after a drawn-out lockdown that began in March.
The real estate market has seen various downs recently because of regulatory amendments, such as the Real Estate Act (RERA), GST, demonetization, the Benami Property Act, the Bankruptcy Code, etc. and the situation of Covid-19 has not been much help as well.
As India’s second-largest employment-generating sector after agriculture, real estate plays an integral role in shaping overall economic development. As the market came to a sudden halt, hasty steps were launched by the government and administrative bodies to boost buyer sentiment. After periodic cuts, the country’s banking regulatory RBI lowered the repo rate to a 15-year low of 4 percent. And thereafter, financial firms lowered the average price of their home loan items. Many public sector banks are currently providing housing loans at less than 7 % annual interest.
Another aspect that works for buyers seeking to purchase right now is the fact that India’s developers currently have a lot of unsold housing units. This ensures that the customer can conveniently book ready-to-move homes because they don’t have to stress about project delays. As builders have to pay taxes to the government on unsold properties, they are willing to sell this ready stock at special offers. In addition, extra discounts may also be available during the festive season.
Now the main question arises:
Is it a good time to buy a property after COVID-19?
For end-users with a secure career/business, who are financially in an agreeable position, it is a fine opportunity for them to invest in residential property, taking into account the price advantages, with proper background checks on the developer and project.
Remember that home-buying has long-term repercussions and is not just financial. Most consumers, based on the prevailing circumstances, are currently doing their home purchases. Since remote work is the new standard, most individuals are searching for homes on the outskirts of cities. They might also lose sight of the fact that business conditions may reverse, offices may reopen and it may not be a smart idea to be far from the city centers after all. The option of a buyer’s property must not be solely dictated by the prevailing market situation, no matter how daunting it is.
All points are taken into account, today’s real estate buyers are in a privileged situation and can make the most of it if one has the resources to invest in property. A buyer must, however, take care of different factors in order to make property investment after COVID-19 even more lucrative.