What gives real estate investors an upper hand over others during COVID-19 crisis?
COVID-19 pandemic has had a major impact on the economies across the globe. More than 160+ countries have announced complete or partial lockdown so far. Stock prices are tumbling down and businesses are operating in fear. With China’s economy shrinking for the first time since 1976, many countries have revised their projected GDP growth for the upcoming quarter. In India, the nationwide lockdown has been extended and businesses are still at standstill. People are reluctant to invest their money. However, the stability factor associated with real estate and certain relaxations announced by the government in the favour of investors has driven them to this sector. Here are the following reasons why real estate investors have an upper hand over others:
* Reduction in home loan rates:
As soon as RBI slashed the repo rate and announced the first round of measures to mitigate the impact of coronavirus on the economy, many major banks too announced a reduction in their lending rates. This has made home loans easier for buyers.
* Moratorium on EMIs
RBI announced the three-month moratorium on repayment of term loans by borrowers which means that they would not have to pay the loan EMI installments during the moratorium period.
This decision has been taken after the announcement of the lockdown. Because of the lockdown, many economic activities have come to halt.
* Untouched by sudden market collapse owing to COVID-19
Almost every sector has seen a major setback because of the COVID-19 pandemic but the real estate sector seems to have sailed through this difficult time. It’s stable and prone to major setbacks in the market.
* Discounts & offers to clear inventories
After the SBI chairman exhorted real estate developers to compromise with price & clear inventories, developers might announce various discounts and offer or sell homes at a reduced price. Various developers are already offering exclusive lockdown discounts to their customers.
* Stamp Duty Rate cuts (MMR & Pune)
The government of Maharashtra, in the month of March, announced a 1% stamp duty concession for the next two years. This concession will be applicable to the registration of documents in the areas falling under the Mumbai Metropolitan Region Development Authority and Municipal Corporations of Pune, Pimpri-Chinchwad, and Nagpur. Since the real estate micro-market has been witnessing good growth, of late, it has been garnering the interests of investors.
* Special permission granted for construction work
In order to bring relief to the labor-intensive sectors, the home ministry has allowed construction work from April 20 under reasonable restrictions.
* Expected price rise after lockdown promising good returns
According to economic experts, the economy is going to bounce back after the lockdown is over and real estate may witness a rise in property prices. This assures customers of good returns especially those who are investing during this time when prices are comparatively low.
