India has suffered a lot at the hands of the pandemic - notably by the second wave of COVID - 19.
As we enter the year of 2022, we are afflicted by the third wave and it has taken a wrecking economic toll. We are experiencing a searing drop in the GDP, which happens to be the highest in India’s history. With every informational channel contributing to the details about the virus and its effects, we are going to discuss the effects of the pandemic on the real estate market and some good opportunities that have been ascertained .
Implications on the Real Estate Industry:
As the pandemic has introduced us to the concept of work from home, returning to commercial spaces has been nerve-wrecking and vexing. Hence, the commercial market is still negatively affected by this change in the flow. The lock - downs have led us to the realization that no place is more safe and dependable than our home. The work from home idea is going to be a radical change for the increasing demands of residential real estate. A rise in the price has been observed in the metropolitan cities of India.
Implications on the Home- Buyers:
There are positive changes for the Home-Buyers as reductions have been made in home loan rates. People are loving the trend of fixer uppers. House upgrades and extra spaces have been on the radar of people desiring for a better lifestyle. Under-construction property owners are suffering because of delayed possessions. Companies like Tema Fintech are facilitating Home Loans that are financially beneficial such as minimal EMIs where you can space out your installments over a longer tenure, desirable interest rates and some uniquely special advantages. This will help the buyers to attain the sophisticated home and lifestyle they have always been wishful for.
Implications on sellers:
Residential market has seen an increased demand and cash flow. To enhance their lifestyles and homes , people have been really into buying villas, bungalows and 4/5 BHK apartments. Commercial projects are still going through a slump. Prices have risen in the residential market on a national level. Some updated government policies such as reduced home loans interest rates and some other important moves have uplifted the sale of residential properties.
The Unified Development Control and Promotion Regulations has updated the system which is more favorable for the builder and developer interests in expressions of additional FSI and premium. The significant relaxation in the floor space index eligibility and the provision for depositing a notable amount of additional FSI for an assignment is only one of the most remarkable aspects of the Unified DCR.
Implications on Investors:
Purchasing real estate properties, in the current scenario in strategizing for the post-pandemic times, is the perfect plan for the investors as the property values will increase substantially after the pandemic. The under-construction commercial properties, which have less momentum are turning out to be the most beneficially profitable for an Investor who can take a well-informed risk and invest in Real Estate.
Implications on Real Estate Agents:
During the pandemic a lot of employees lost their jobs leading to an elevation in the scale of channel partners. Outsourcing of sales and marketing to institutional channel partners is being done by smaller companies and organizations who simply don’t have the time and the expertise.
Implications on Government:
The first unlock facilitated the highest number of registrations. A large portion of revenue has been resurrected by the government, through stamp duty and GST. Also, the government has made some much needed progress by decreasing the interest rates in home loans.
Implications on Banks:
The pandemic had some negative effects on the lending side of the banks. Paying interests on saving accounts and FD is being emphasized by the banks. The same did not correspond towards the lending side due to the diminishing demand of loans. Since the situation has been steadily improving, the banks want to reciprocate by lending aggressively and aid the real estate business which seems to be booming because the whole work from home scenario has led to the increasing demands in the residential properties .The decreased interest rates of home loans has also led increase of traffic at these banks. Real estate changes are clearly subjective to a lot of aspects whether they are social, political or environmental. After discussing the pros and the cons, the recent implications ,the new upgrades and some of the old principles relevant to the real estate market; we can positively say that some good scores are projected for the future of this sector.
What do you think about the impact of the decreased interest rates on the home loans on the real estate business?