The Covid-19 outbreak has, undoubtedly, brought about a significant halt to global business cycles and economic activities. Millions of people across the globe have been affected due to this pandemic, and it has impacted various sectors, including real estate that faced disruption. Still, there is also a hope for recovery. The market is slowly getting back on track, and according to market sources, Bangalore’s real estate market will bounce back faster as compared to the other markets.
According to a Consumer Sentiment Survey by ANAROCK, Bangalore was among the most preferred cities as about 82% of the respondents had booked their homes either during the lockdown or just before it. It further states that 48% respondents preferred residential real estate as the best investment option during Covid-19 against other asset classes mainly due to lower risks attached, and 54% respondents considered ‘now’ to be an ideal time to buy a home as they have the opportunity not just to negotiate a good deal but also get home loans at all-time low-interest rates.
Even though the real estate market has been impacted massively, on the contrary, experts suggest that 67% of homebuyers still want to go ahead and buy property despite having a smaller budget.
The following are the major reasons why Bangalore sailed through the pandemic and how we may see a quick recovery of the market in the coming months:
Reduction in stamp duty: The Karnataka government’s timely decision to cut the stamp duty rates from 5% to 2% for properties costing up to Rs 20 Lakh and 5% to 3% for properties priced between Rs 21 Lakh and Rs 35 Lakh came just in time when the pandemic was at its peak. This reduction aimed to boost the volume of property registrations and aid homebuyers during the pandemic. The move brought about a positive sentiment for properties with stagnant prices and unsold inventories.
Facilitating digital home buying: Surprisingly, even though the lockdown did cause an inconvenience for people to visit sites to make their final buying decisions, customers have been engaging proactively through digital platforms. This is a shift that we may witness even in the future. Developers have now given homebuyers the privilege to sit at home with their families and have a virtual visit to the house they aspire to buy.
Along with the market leaders, a lot of local developers in the city also enabled the facilities of virtual tours, online payments, digital signature, and video conferences to enable digital sales during the crisis. Additionally, these situations have also provided an ideal environment for NRIs to invest in the city’s realty market. During the crisis, a lot of NRIs were attracted to investing in Bangalore’s real estate as it allowed them to fall back in case of any trouble caused by the crisis.
Robust connectivity and infrastructure: While buying a property, one must consider the long-term investment in the location. That is what defines the potential of Bangalore’s real estate market, which is soon to propel growth in multiple areas owing to its upcoming infrastructure. The proposed Outer Ring Road, a major roadway, will run around the perimeter of the city and connect all the major highways around the city. Along with this, the upcoming metro lines and the extensions of the existing metro lines, will decongest the roads and cater to the current traffic issues of the city.
Research suggests that Bangalore’s real estate market has proved its potential by having a mere drop of 5% in pricing during the lockdown, which is very low compared to the other markets. Developers will be more cautious now in launching new projects and will consider the homebuyers’ budget and requirement before the launch.
This phase has, undoubtedly, provided an opportunity for home seekers to buy their dream homes. As things slowly get back to normalcy, Bangalore will surely witness a recovery.
This article is contributed by Uday Bhaskar, Business Head South, Godrej Properties Ltd.
(The views expressed here are solely those of the author and do not necessarily represent or reflect the views of RoofandFloor)