One of the biggest financial decisions of our lives remains to buy a home, but owing to the current market scenarios, many of us refrain from investing in the property market. There are several hypotheses associated with, is real estate a good investment during COVID-19? Ok, let us forget about all the theories and drill down.
Currently, the real estate market is driven by perception. Investment in metro cities or non-metro cities is more valuable. Few theories suggest that metro cities are most profitable than non-metro cities.
Past experience shows that tier II and tier III cities are experiencing incremental growth compared to tier I cities. Tier II & III cities in the future will see growth as a lot many corporate establishments are planning to invest in those cities rather than consider it to tier I. It is more profitable for them especially for pharmaceutical and large manufacturing units.
Every investment is comprised of risk but investment in real estate is less volatile compared to other investments like bonds, shares, and gold.
Some of the reasons why real estate is a better investment than the stock market
Lower interest rates, Government support, Freebies offered by developers, that are new trends in real estate.
Lowest interest rate new trends in real estate
Now the interest rate is one of the lowest in 15 years and ready to move or close to completion projects are ideal to invest in the property.
However, in the present pandemic crisis real estate sales impacted a little bit. But post-pandemic buyers will turn up in the coming six months. real estate trends 2022 is the most trusted investment class that buyers can afford.
After all the major measurements taken by the government, the market has seen an upward trend, and post lockdown schemes are the additional booster to invest in real estate in the coming 6-8 months.
Freebies from the developer’s end
Few developers rolled out innovative payment options along with some freebies like Free Garage, home appliances to the car also. In this way, the market has improved and will reflect on the overall performance.
At present prices are at the bottom and they will increase 5%-10% in the coming months. So by understanding this, It is the best time for real estate investment.
Upcoming Demand & Trends because there are three kinds of Demand planning out because of COVID-19.
- Demand gets lost forever
- Post-COVID-19 Returning Demands
- And New Demands appear because of pandemic
I have a question for you, where to invest?
Will you visit a mall or a restaurant or a high street shopping area immediately post Lockdown?
The Biggest hit is for the Retail Commercial Real Estate, as you know the malls, restaurants, food courts, resto-bars, pubs, gaming zones, cinema halls are the last ones to open post lockdown.
The automobile industry reported ZERO sales across the country for April and it’s a brainer.
Many regional brands that were operating month to month with poor cash flows are expected to shut down their operations.
In the Office Space segment, there are larger offices in Tech Parks, SEZs (Special Economic Zone) and there are Co-Working Spaces. Work from Home has become a norm, we may feel that many companies may downsize their real estate.
But experts don’t feel so from that happening much largely.
There are many factors as client confidentiality, poor bandwidth issues, home infrastructures, etc. discouraging large companies to risk on blanket WFH.
Having said that they also feel that the decisions on expansions are going to be slow, management of these firms will be having a wait and watch approach. And for Co-Working spaces, doubtfully the elasticity is what attracts start-ups & small businesses.
There are Warehouse, Industrial segments in which experts bet on getting greater demands to post COVID-19 considering worldwide emotions cutting back on China’s dependency. There are already governmental reforms en route to grabbing such opportunities.
Warehouses are expected to mushroom within the city and town limits for the last mile faster supply and this one segment is going to see a phenomenal action in the coming months.
I know you have been wondering about Residential Segment, we have been locked down in our home for how many days, months, or more than a year now? 365 days or more? I have a question for you.
Do you ever felt in this lockdown that you need more space? This itself along with WFH is going to create newer demands. There are needs and there are aspirations, the time has come for the aspirations to turn out to be needed.
I mean every one of us wants a bigger space and an extra room now post COVID-19. A person living in a 2 BHK is now expected to enquire for a 2.5 BHK, a family living in a 3 BHK now prefers slightly a larger 3.5 BHK likewise it goes on expansion mode.
With lending rates falling and developers coming out with innovative schemes, there is going to be enough demand at least in the ready-to-move-in category. Considering WFH buzzing all around, people wouldn’t mind living slightly far away from the workplaces.
It is okay for them to travel that extra mile twice or thrice a week. New residential hubs will be created, with fresh demand here. If you are considering buying your next lockdown home now? Then it is the best time to buy real estate and make it a good investment for you.