Over the last few years, the Indian real estate sector saw a slew of structural reforms. From RERA to GST to liquidity issues due to NBFC crisis, the sector’s growth was derailed, resulting in low consumer sentiment. It was only in the last quarter of 2019 and early 2020 when the sector embarked on a recovery phase after adjusting to the new reforms.
However, the COVID 19 outbreak has once again dampened the confidence of various stakeholders. The nationwide lock-down, coupled with reverse migration of construction workers, has put the sector under immense stress. Pay cuts and job uncertainties have forced prospective buyers to tighten their purse strings.
In this backdrop, RoofandFloor spoke to various industry leaders to understand the home buying scenario post-COVID 19.
Online portals to gain prominence
The arrival of online home listings, which served as a meeting point for buyers and sellers was one of the first things that completely changed the way buyers approached the house-hunting process. This was then followed by property walkthroughs, 360-degree view of the entire property, and virtual site visits. With this, prospective buyers could see multiple homes in a matter of minutes, from the comfort of their homes. Going forward, this is going to be the new normal.
In fact, “Since the lockdown, the demand for virtual site visits to shortlist a property has increased significantly,” said Ashutosh Kumar, Lead, TrueAssist.
Reiterating the same, Rahul Phondge, CBO – Residential Services, ANAROCK Property Consultants explained, “Approximately 80% of the home seeking process already takes place online. We will see more of this process now getting digitalised.”
With RERA in place, a lot of essential details and documents related to the project is already available online. To further ease the process, the government is also mulling e-registration of properties.
However, “the usage of technology still remains limited to specialised agencies and developers. Approximately 90% of the Indian real estate industry – both in terms of developers and brokerages – is still unorganised, and such players tend to remain stuck in the non-digital age,” added Phondge.
Integrated townships to see high demand
Integrated townships are likely to see high demand in the coming times. “Projects close to conveniences, such as grocery stores, medical shops, petrol pumps, will see more traction,” believes Rohit Poddar, Managing Director, Poddar Housing.
This was also backed by a recent report by Ernst & Young, which stated that post the COVID 19, self-sustainable integrated townships might remain a preferred choice of homebuyers.
Integrated townships are spread over large land tracts, providing a holistic living to its residents. It also offers an array of housing options to suit different budget and size needs.
Affordable housing is set for record growth
The pandemic has brought out a newfound appreciation for owning a home. Not to mention, prospective buyers can now benefit from all-time-low interest rates on a home loan.
The demand for affordable homes is expected to increase due to the low entry point.
Explaining the reasons, Rakesh Reddy, Director, Aparna Constructions & Estates Pvt. Ltd. says, “Affordable homes require low upfront capital and are easier to sell. Thus, it is good for both self-use as well as investment.”
Government has also announced various measures to encourage fence-sitters to take the plunge. Just last week, the RBI reduced the repo rate from 4.40% to 4%.
Housing demand in Tier II and III cities to improve
As remote working becomes the ‘new normal’ for companies, many professionals are returning to their native places. While the reverse migration is currently visible among migrant labourers, “this trend can further percolate to skilled professionals who have been or may be off-rostered,” says Anuj Puri, Chairman – ANAROCK Property Consultants.
In such a scenario, the demand for housing in Tier II and III cities is likely to increase in the times to come. Additionally, “many NRIs will also return to India amidst dwindling job prospects, particularly in the US and European nations, which account for nearly 70% global cases. Many of them, will consider smaller cities where they can be close to their families,” he further added.
Property prices to remain stable
Will the property prices fall in the coming months? Well, many real estate developers have echoed the fact that due to high input costs (cost of land acquisition, obtaining requisite approvals, and cost of raw materials), there is not enough headroom for a price correction.
However, to revive consumer demand, one cannot completely rule out the possibilities of short-term corrections. Developers may also resort to offering freebies to attract prospective buyers.
Overall, “property prices are likely to remain stable, though the prices in premium projects with superior amenities and locations may increase,” says Phondge.
Advice for homebuyers
Challenging times always come with a plethora of opportunities. “2020 is a year that people can buy homes at cheap prices owing to cheaper rates and other benefits. Investing in real estate will give homebuyers a real asset that they can rely on in times of such crisis,” concludes Poddar.
Buying a home for the first time is an extremely challenging financial task for most of us. On top of it, the prevailing global economic crisis arising out of the Covid-19 pandemic has made home-buying even more difficult. If you had plans to buy a house this year, the sudden stream of unprecedented developments might have left you wondering how you should go about executing them now. And the answer to this confusion isn’t clear yet owing to the many factors at play here.
Buying a home for the first time is an extremely challenging financial task for most of us. On top of it, the prevailing global economic crisis arising out of the Covid-19 pandemic has made home-buying even more difficult. If you had plans to buy a house this year, the sudden stream of unprecedented developments might have left you wondering how you should go about executing them now. And the answer to this confusion isn’t clear yet owing to the many factors at play here. Luxury segment will see major hit.
the prevailing global economic crisis arising out of the Covid-19 pandemic has made home-buying even more difficult. If you had plans to buy a house this year, the sudden stream of unprecedented developments might have left you wondering how you should go about executing them now
very informative article.. thanks for sharing this with all