Read This Residential Market Analysis Before Buying Your Dream Home

Low-interest rates, more affordable homes and tax relief: what does it all mean if you’re planning to purchase a home now?

While the pandemic has majorly hit the real estate sector during the lockdown, one finds that it is the right time to buy a home or invest in a piece of property. Also, it has given an opportunity for the developers to adopt new business strategies and support their customers more seamlessly than ever before.

As these reforms take effect, the real estate industry is experiencing a rapid recovery and will potentially shift to a profitable direction in the months to follow. Learn more about the current residential market analysis before making an investment decision.

Covid 19 And Its Impact On Real Estate

During the lockdown, the real estate market has halted. As the economy experienced its worst decline, home prices, construction activities and business cycles have deteriorated steeply.

Now under the government’s relaxation, the different deals that have been put on hold are now picking up the pace and are expected to pull through soon. However, the disruption of various activities and the return of migrant workers from several cities might hinder the construction activity to come back in full swing in the near future.

Real Estate Market In The Southern States 

The data collected by the Magicbricks indicates that due to the effects of the pandemic, the purchasing intent in the cities of Bengaluru, Chennai and Hyderabad was less affected compared to other residential markets. Also, more than 50 per cent of homebuyers seemed certain about the price movement in these markets. So why do these three markets stand out?

Bengaluru

In Bengaluru, the real estate market has witnessed healthy growth with stable demand and supply. Over the last five years, the data shows that there has been a steady momentum with 17.7% and 33.3% growth in ready-to-move and the under-construction price ranges.

However, the prices dropped by 3% in the last quarter due to the pandemic. The government’s relaxation of reducing the stamp duty on properties up to Rs. 35 lakh also helped the sector to bring the consumers back to the market. In addition, many developers have used new business strategies during the pandemic such as virtual tours, and video conferencing and safe online payments.

Chennai

In Chennai, the real estate market saw a momentary decline due to the pandemic, but the data shows that there has been a rising demand for affordable homes in the major employment hubs during the months between April-June. Over the last couple of years, the numbers of affordable residential projects by developers has been increased. Improving connectivity, peripheral roads and more residential options with affordable prices are particularly driving the market in the city.

Hyderabad

The real estate market of Hyderabad has witnessed steady growth with a positive impact on the residential properties. The measures like not increasing the stamp duty and registration charges are likely to go well to support the decreasing demands of properties amongst customers. Government initiatives such as giving permission to construct a house through self-certification (built-up area <675 sqft), spending Rs.50,000 crore for the development of Hyderabad Urban Agglomeration Area in the next five years, and demand of IT sector in the city would result in the long term growth in the market.

Source: https://bit.ly/3oBSew4

Residential Market Analysis Insights – 2021 (Localities To Invest, Price Range and Many More Details)

Bangalore

In Bengaluru, the real estate sector has scaled back to normalcy, as there has been 47% rise in property searches after the lockdown, as per the survey. Properties costing less than Rs 5,000 per sqft, were in huge demand.

Interestingly, the data from Magicbricks reveals that the customers searched more for 2 and 3 BHKs with affordable rates. This showed that homebuyers maintain the preference for size, but with a minimized budget to move to the periphery.

Due to continuous IT growth in the area and the upcoming metro facility, Whitefield, Sarjapur Road and Bellary Road continue to be the top three preferred destinations for properties amongst customers.

It has been noticed that after the lockdown Kanakapura Road has seen a significant rise in the demand due to the upcoming metro line from Yelachenahalli to Anjanapura. The new office of Amazon (Bagmane Rio in Mahadevpura) and Apple (expected near Cubbon Road) will surely boost the demand for properties in the neighbouring areas.

Chennai

In Chennai, the residential sector saw a moderate recovery, having increased after the lockdown by 35 per cent. Following the pandemic crisis, it has been noticed that there has been an increasing demand for 2BHK with affordable prices amongst the customers. It also indicates that Chennai’s demand for luxury properties has dropped since the lockdown, according to the report given by Magicbricks.

Chennai thrives on a healthy mid-segment audience with stable demand and supply balance. As buyers expected a significant increase in potential opportunities due to the forthcoming metro line, Porur experienced a huge demand for real estate (Poonamallee-Lighthouse).

Hyderabad

According to Magicbricks, during the months of July-Sep 2020, the Hyderabad residential market has seen a rapid recovery in the search volumes for plots and independent houses. In the western and northwestern suburbs and peripheral areas, the demand for residential properties remains strong.

Gachibowli and Kukatpally continue to be the residential hotspots and have remained the homebuyer’s most sought-after destination. The excellent Miyapur-Kukatpally-LB Nagar metro connectivity, the proximity to major employment hubs and the availability of a healthy mix of affordable and luxury properties are the result of a growing demand for residential spaces in both of these locations.

Projects with ready-to-move status are likely to remain favourable among buyers and demand is expected to tilt towards the smaller configuration of 1 and 2 BHKs across cities. 

Government Initiatives And Policies 

Stamp Duty Reduction

Karnataka has reduced the stamp duty followed by Maharashtra, which has temporarily reduced the duty since September 1. The state government of Karnataka has reduced the property registration fee for flats costing less than Rs 20 lakh from 5 per cent to 3 per cent. This will help the homebuyers save up to Rs 40,000 and most importantly, it will help drive demand in the affordable housing sector.

Low Interest Rate

In the recent past, the Reserve Bank of India (RBI) has cut the repo rate on many occasions, resulting in the interest rate for home loans lowering down to 7 per cent. As a consequence, this will help in reducing the EMIs. A year ago when the home loans interest rate were in the range of 8-9%, for example, Rs 50 lakh loan amount for the tenure of 20 years at 8.5% p.a. would have meant an EMI of Rs 43,391. But now, with the interest rate of 7 %, EMI would go down to Rs 38,765, resulting in savings of Rs 11 lakh in total interest payable.

NRI Investment In Real Estate Amid COVID-19

As the US and Europe were seriously affected by the pandemic, the coronavirus crisis created an investment opportunity for Non-Resident Indians (NRIs) in the Indian real estate market, which adversely affected opportunities in their regions.

Another factor, which continues to fuel this trend, is the falling value of the Indian Rupee against the US dollar. While the phenomenon is not suitable for the economy, it is beneficial for NRIs, as it leaves them with more disposable money in Indian real estate markets.

The value of Indian Rupee dipped from Rs 71.32 to Rs 75.36 against the US Dollar. Moreover, with the reduction of Repo Rate in the market, will help the NRIs.

Source: https://bit.ly/36UMszA

Measures Taken By Developers For Homebuyers’ Safety

A large number of developers have taken many precautionary measures to protect employees and buyers from the COVID-19 infection. These include maintenance of strict hygiene rules, social distancing and not crowding the sales office.

Other measures such as:

• Temperature screening of employees and visitors
• Asking travel history of the visitors
• Making the masks compulsory within the premises
• Increasing the use of sanitizers inside the office

Market Size By 2040

As per the report, the real estate market is projected to rise to Rs 65,000 crore (US$ 9.30 billion) by 2040, from Rs 12,000 crore (US$ 1.72 billion) in 2019. India’s real estate sector is projected to hit a market size of US$ 1 trillion by 2030, from US$ 120 billion in 2017 to 13% of its GDP by 2025.

Several steps have been taken by the Government of India along with the governments of the respective states to promote growth in the sector.

A prime opportunity for real estate companies is the Smart City Initiative, with a proposal to create 100 smart cities. India formally approved 423 SEZs on July 31, 2020, of which 248 were already in operation. The IT/ BPM sector contains most Special Economic Zones (SEZs).

Source: https://bit.ly/375dftb

Wise To Invest Now?

For different reasons, people want to have their own house, one of which is the pride of homeownership. Nevertheless, every moment might not be suitable for buying a house. At present, almost every industry, including real estate, has been disrupted by the pandemic. Keeping that in view, is it wise to invest now?

No wonder, several surveys conducted by property consultants have recently reported that housing enquiries in the top cities have bounced to 50 per cent of the pre-COVID-19 rate. But with the multiple relaxations by the government, it is sure that this is the best time to invest in residential properties or a piece of land.

What Lies Ahead in 2021?

The combination of all these factors clearly shows that there will be an increase in the demands of properties in Bengaluru, Chennai and Hyderabad in the months to follow. With the new technologies used by the reality platforms and making the overall process of searching and buying properties easy and simple to the customers, all these three cities will witness a major demand from the IT professionals.

Watch this space for our upcoming projects.