By Annuj Goel
The second wave of coronavirus is badly hitting the business of almost every sector in India. Very few people had imagined that Covid-19 will be back with such a drastic change and will kill people in such large numbers. Due to lockdown imposed in many states and districts, businesses are facing the heat of pandemic and bearing immense and unimaginable losses.
When the first wave of coronavirus hit India, experts were of the opinion that real estate will be one of the sectors to be terribly impacted by the Covid-19 pandemic since lockdown was imposed to curb the spread of the disease, and hence construction work also came to a halt.
Also, there was a mass exodus of labourers from big cities like Delhi, Mumbai, and others which acted like salt on the wounds. But, contrary to the expectations and predictions by realty experts, the real estate sector in many states and cities witnessed a rise in the booking of flats.
Now, since the second wave is here, in terms of real estate a million-dollar question again comes to the fore – Will resurgent coronavirus impact real estate prices across India?
Going by the trend seen in the real estate sector during the first wave of coronavirus in India in 2020, the prices in the realty domain will see an upward movement and it has its own reasons and logic to it.
Work from home
Amid a rise in coronavirus cases, most of the firms have opted to work from home so as to curtail the further spread of the Covid-19 pandemic and save more and more lives. Since working from home is becoming new normal so people require an additional room to complete their office tasks peacefully. This has given a rise to a trend of people buying properties wherein at least one room is dedicatedly there for the office work.
Spending more and more time with family
Since many people have stopped going to the office as they are working from home, hence they have more time to be spent with the family; which means more time at home. This is also expected to give rise to the demand for bigger and better houses/flats so that people can spend quality time with their friends and family.
Actual buyers: For residence, not investment
There has been a huge surge of demand by people who want to buy flats for actual residential purposes, not just for investment or realty value appreciation. Keeping in view this trend, a further spike is expected to be witnessed in the real estate sector.
Low home loan interest rates
Most of the banks are now offering home loans at all-time low interest rates. Since the home loan interest rates are favourable, home buyers are expected to mint the benefits of the bank offers for their dream houses.
According to a real estate report, the residential sector has picked up steam in Q1 2021 (January-March 2021) due to a number of new realty project launches. Moreover, the report reveals that the demand by homebuyers has increased as compared to the previous quarter.
Also, private equity investment inflows into the Indian real estate sector totalled USD 1.9 billion (INR 135 billion) in Q1 2021, according to a recent study. Home buyers are regaining confidence in the realty sector despite Covid-19 pandemic-related slowdown.
The first quarter of the year 2021 has already seen nearly a third of the investment inflows seen in the entire year of 2020.
The current unprecedented surge in Covid-19 cases left various state governments with no other option except curfew or partial lockdown but soon as cases are coming down the situation will be under control soon, and the real estate sector will flourish even more.
Undoubtedly, lockdowns and curfews show an impact on the real estate sector but this sector is known for making amazing comebacks as it did last year once coronavirus cases started dying down.
The prices in the real estate sector are bound to go up, especially of the projects by reputed builders know for delivering inventories within the promised time frame. There is a simple rule of demand and supply.
Since, demand from the actual homebuyers is going up due to a number of reasons – work from home, low home loan interest rates, more time with family to name a few – prices too in the realty sector is expected to witness a spike.
(Annuj Goel is the MD, Goel Ganga Developments)