The virus outbreak has disrupted several businesses, consumers are in hiding, demand is reduced, the supply chains are broken, and many sectors have been hit hard. What about real estate? Well, the industry is also struggling under the influence of the coronavirus pandemic. So, can it even be a good time to invest in a home? Should you be buying your dream home now? The answer is yes. ‘This is the best time to buy property in India’, predicts Ruchir Sharma, head of emerging markets and chief global strategist at Morgan Stanley Investment Management, a multinational financial services company .
Here are some reasons why you should consider buying your dream home in times of pandemic:
Steady property prices: Over the last three years, people’s incomes have risen, while property prices have not, because of an oversupply in housing units. That has made homes in India very much affordable. While the property prices are stable, the government is readily providing financial and other help to home buyers to infuse a cash flow in the economy. The government has announced generous interest rates with lower LTV.
Multi-decade low home loan rates: No one is oblivious of the fact that inflation has gone up and, after a very long period, the net real estate interest rates are negative. The mortgage rates are at an all-time low; they dropped from 10-11% to 7%. It is generally said that a per cent down on the mortgage rate could mean the price of purchase of your property is down by 5% effectively.
Builders are willing to negotiate prices: Being in a situation where builders don’t have much choice, they are willing to negotiate prices. The real estate industry has been on an economic downcycle. The prices are either flattened out or the builders are prepared to settle on lower rates.
Real estate – a stable asset: The volatility and unpredictability of the stock market not only puts your wealth in danger but also takes away your confidence as an investor. That brings back the times when the real estate industry was considered a stable asset class. Nowadays, rental yields are improving, and that generates a steady cash flow for the investor.
COVID-19 pandemic has taught everyone the importance of ensuring the security and stability of the family. People have started realising the value of owning a home and, luckily, time is also favourable. The measures being taken by the builders and the government to boost up sales and the other above-mentioned reasons prove that this is the best time to consider buying a home.