Real estate has always been considered as one of the most stable investments. It is often symbolic of one’s status and wealth within the community. It provides the much -needed identity in the neighborhood. The importance of owning property as an asset has only increased with time. This is unlikely to change soon, especially in a post COVID-19 scenario where the risks attached to buying stocks have increased. Similarly keeping money in the bank now fetches very low returns.
During this lockdown period, it gives an ideal opportunity for smart buyers to invest their valuable time in searching, evaluating and narrowing down the choices for their dream home with credible builders. And technology is helping all such smart buyers to get the best deal.
Today, most businesses are moving towards digital transformation, including real estate sector. Developers are increasingly leveraging as well as experimenting with different digital platforms to engage with the customers. From the most common tools such as video calls and social media to new-age technologies like Augmented Reality (AR), Virtual Reality (VR) and drones are increasingly finding application across real estate business platforms in the current situation. These technologies are enabling developers to provide virtual tour of the projects and engage with the potential customers. This can be a great trigger for buying decisions while staying indoors. Moreover, the first step towards buying a home for most home buyers begins in the digital world.
To supplement this, the recent repo rate and reverse repo rate cuts have made home loans cheaper. The interest rate is likely to touch as low as 7 percent. Therefore, post lockdown is an ideal time for home buyers to come out and take advantage of the lower home loan interest rate, especially those who have been deferring buying decision. It is believed that close to 75 percent of the funds made available by the banks swing towards real estate investment. And going forward uncertain times will become a part of our new normal. We all must learn to live with it and invest wisely in products with longer shelf life and with appreciating value.
The festive period in the latter half of the year is likely to supplement the momentum in the housing sector, with attractive deals and offers. In addition, there are benefits for projects that fall under the affordable housing category. These homes start from as low as Rs. 45 lakhs. To make things even more lucrative for the home buyers, the Government had announced an increase in the tax deduction limit on the interest paid on purchase of affordable homes to Rs 3.50 lakh from the earlier Rs. 2 lakh during the budget. Further, the Government had reduced GST rate to 1% for affordable homes and 5% for other under-construction homes last year.
It is expected that post this lock down period; the Government is likely to incentivize the home buyers further. Needless to emphasize that this is a critical sector which adds almost 7 percent to the national GDP and more than 200 ancillary industries and lakhs of people are dependent on the success of this sector. Eminent bodies like CREDAI and NARDECO are working incessantly in urging the government to help build that much needed sentiment and climate in the country which will give the necessary fillip to the economy. We are certain that when the coronapocalypse subsides, smart home buyers will reap the benefit of better priced deals, lower home loan interest rates and myriad incentives by the government. The organized builder community will not be found wanting in any respect, be it – on time delivery of world class products with transparency and perfection.
Overall, while the short-term impact of the pandemic may seem to be negative, it is likely to trigger positive changes in the entire ecosystem, making it a win-win scenario for home buyers and developers alike.
