The Coronavirus pandemic and the lockdown it brought about has evidently created a hard time for the real estate companies. However, they now see a light of hope with falling interest rates on home loans. This would certainly act as a catalyst and attract more buyers. RBI has recently decreased repo rates by 40 BPS, taking the total fall in repo rates since lockdown begun up to 115 BPS. As a result, the rates are now as low as 4%.
As a result of the decline in repo rates, interest rates are falling. EMI has already gone down to 7.5% and is expected to fall further. These are great news for homebuyers as the properties are becoming more affordable for them.
Other than the affordability, a number of factors are pushing up the demand for properties. The pandemic and the high requirement for safety measures have brought about the need for having a home of one’s own. This would help the people maintain their own health and security and thus stay safe from COVID-19. As a result, residents living on rent are now planning to buy their own homes and shift there. Moreover, with a large number of people losing their jobs and thus finding it hard to consistently keep paying their rents, they prefer to purchase a home.
The job losses have also triggered a phase of reverse migration. People coming back to their hometowns after losing employment in the metro cities are now seeking new homes. Another section of people among whom the demand for residential properties is increasing is that of investors. Although the real estate sector already held a large number of Indian investors, the stock market attracted a fair share as well. Now with the stocks fluctuating and resulting in heavy losses for many shareholders, they are switching to real estate. Homes are much more stable sources of income and at a time when employment is scarce, such sources are high in demand.
According to reports, most homebuyers are seeking ready-to-move homes in the affordable and mid-budget segments. Many developers are increasingly focusing on such projects and additionally offering special rebates, refund policies and more. This is a good time for homebuyers to make their purchase as interest rates are low, developers are offering favourable deals and home investments are growing more profitable. It is expected that several good changes are going to emerge in the realty sector and the post-COVID era would see the industry on a stable path towards flourishing.