Good Time to Buy Real Estate- Business News
Illustration by Raj Verma
Real estate is one of the most significant investments that will consume years of savings. The sector, which was already struggling in most of the country, has been stalled due to the lockdown. From July when the unlocking process began, things started to improve.
However, the question that everyone wants an answer to is, is this the right time to buy a property? “While some of the excitement may have been due to pent-up demand and discounts, the demand for residential property is expected to continue to grow steadily in 2021,” said Sharad Mittal, CEO of Motilal Oswal Real Estate.
“Given the performance of the sector over the past two quarters, the recovery will continue and the sector should be ahead of Covid for the next few quarters,” said Kanika Gupta Shori, COO of Square Yards.
The recovery wasn’t even across the country. “The affordable residential segment will top the charts and cities like Hyderabad, Bangalore, Delhi-NCR, Mumbai and Pune will see inventory declines as stable prices and low interest rates drive sales. Peripheral markets will do better if, however They offer units that are in line with the budget and desired unit size of most buyers, “says Gupta of Square Yards.
Best time to invest
While rental returns have remained intact, the decline in the deposit rate makes them more attractive. According to Mittal, the difference between rental yields (3 percent) and interest rates (7 percent) has become very small. Real estate appears attractive even with a slight appreciation of 3-4 percent. In addition, tax benefits on interest and principal on home loans reduce the cost of a loan for those in higher income tax brackets below 5 percent.
“While end-users shouldn’t try to time the real estate market, real estate prices are the lowest. Buying now equates to buying at the lowest possible price,” says Prashant Thakur, Director & Head, Research at ANAROCK Property Consultants.
If you have a higher risk appetite and want to invest in commercial real estate, you need to be very selective. “Class A assets have remained stable even during the pandemic, with more than 90 percent rental collections. With a vaccine near the completion of a vaccine for production and distribution in India, we expect commercial office space to grow on net absorption with stabilized rents in 2021, “says Mittal of Motilal Oswal Real Estate.
REIT has also proven to be a great option to capitalize on real estate investments with less money. “Both publicly traded REITs in India saw strong rental collections of over 97 percent during the pandemic,” says Mittal of Motilal Oswal Real Estate.