Is it the right time to buy a home?

Representative Image.Pic/iStock

The real estate market in India is one of the pillars of the economy and is the second-highest employment generator in the country after agriculture.

"In the context of the pandemic and with the rollout of the vaccine, real estate is expected to grow with renewed vigour. The current focus on 'Stay home, stay safe' has reinforced the importance of homeownership as living in an owned home is much safer and secure than the uncertainty faced in a rented home."

Shankar Sastri, Joint Managing Director, Sterling Developers Pvt. Ltd says, "The sector is deeply interlinked to as many as 250 allied industries and accounts for nearly 6 -7 per cent of the economy, which is set to rise to nearly 13 per cent by 2025. The sector has also been one of the biggest wealth creators in the past few decades."

Recently, the government has also introduced a lot of reforms and incentives for homebuyers to promote housing. Shankar shares many factors that make an investment in residential real estate lucrative in this scenario.

Low home loan interest rates

The current home loan interest rates offered by banks are the lowest in the last decade and are a big boost to homebuyers. The overall cost of buying a home goes down drastically with lower loan rates, which makes it the ideal time to buy your dream home. The RBI has maintained repo rates at a lower level to ensure that home loans are less expensive for homebuyers. Also, demand in real estate is highly dependent on the intensity of interest rates as they impact the monthly budget of buyers.

A secure and tangible asset class

Real estate has always proven to be a secure asset class and a tangible investment in times of crisis like the pandemic, a global calamity that has brought back attention to secure investments. Post Covid-19, everyone wants to buy a home that they can call their own given considerations of health, hygiene and social distancing. Fence-sitters too were prompted to buy homes, which has given a boost to residential real estate. This year will see a surge in demand for homes owing to not only reasons of safety, but also because of the volatility across stock markets. This has made real estate a safe investment class.

Availability of exciting offers and attractive pricing

There are many other factors that explain why it is the right time to purchase a property now. Property valuations are at realistic, bottomed-out levels, stamp duty is lower in some states and developers are offering flexible payment schemes, cost-saving incentives and other offers as well. All this implies that you don't buy a property at an inflated price and developers are willing to make it attractive for buyers. There are very real savings to be secured.

Preference for Ready Move-in properties

There are also several options available in the market with ready-to-move (RTM) properties. The prices of RTM properties are almost at par with under-construction homes in many areas and this has not happened before -- and since developers have restricted new supply, it is unlikely to happen again. The sentiment is positive for homebuyers who are showing greater interest and are opting for branded developers to ensure that they get a premium product. There has also been a keen interest in villas, as this serves the purpose of a standalone home but at the same time is within a community with a host of amenities.

Upgrading homes post-pandemic

The fear of the pandemic and the uncertainty has resulted in people, now more than ever, wanting to upgrade their living environment. Homebuyers are also looking to upgrade to bigger spaces for reasons of safety and this is fueling demand in the real estate sector making it the best time to buy property. Customers' aspirations and their desire to upgrade their lifestyle have certainly fueled the increased interest in luxury homes too. Those who had planned to buy a home within a certain price band are willing to stretch that to ensure they are purchasing multifunctional homes. Those who had saved up the money have come forward and shown keen interest in investing right now.

Demand for planned developments

Apart from owning a home, there is a rise in demand for developments that are integrated and well-planned and offer a host of modern amenities. These self-sustaining, compact urban ecosystems are now more than just lifestyle upgrades -- they provide the kind of environment that makes a big difference during such an outbreak. The emphasis on this requirement will be high in the new normal. Locations that comprise a strong mix of physical and social infrastructure and are relatively better priced in comparison to expensive locations have witnessed a higher demand recently.

High demand due to capital appreciation

Triggers like attractive rental returns and capital appreciation have also enhanced the trust factor in real estate among buyers. Real estate value constantly increases over time and surpasses other investments. Investing in real estate allows you to safeguard yourself and your wealth. The value of the home will always be an excellent stand-by in case of a crisis.

The growth forecast for the Indian economy has been assessed by the International Monetary Fund (IMF) as positive, which will maintain the momentum of demand in the residential real estate sector. With lockdowns, last year and this year bringing to the fore the volatile nature of high-risk investment instruments, real estate has proven to be a safer and more stable investment. Real estate players with a strong track record in the industry would definitely benefit from the current scenario. The post-Covid scenario will not just alter the homebuyers' preferences and developers' strategies, but also usher in a new dawn in Indian real estate. Thus, homebuyers should make the most of this positive climate and make an investment in residential property.