[ecis2016.org] This Akshaya Tritiya, it may make better sense to buy real estate, instead of other assets. Here are the reasons why
As Akshaya Tritiya is considered an auspicious time to invest in property, every year, prospective home buyers hope to finalise their purchase during this period and also look for lucrative offers to sweeten the deal.
You are reading: Akshaya Tritiya offers amidst the COVID-19 pandemic: Should you buy?
However, due to the COVID-19 pandemic and India under a complete lockdown, real estate investment is taking a backseat for most of the investors, right now. Over the past two to three years, property prices in most places have not increased and in certain cases, it has even gone down. Consequently, home buyers today may be able to get houses for a lesser amount, as compared to those who purchased around four years ago, by around 30%-40%, adjusting for the interest paid on the investment.
Read also : Property price trends and forecast for key metro cities, in 2017
In this midst of this slowdown, most of the builders are offering deals with refundable booking amounts, to keep the cash flowing, while many have also announced subvention schemes to lure investors. Some real estate developers have also announced festive offers amid the Coronavirus pandemic, to make home buying more lucrative. For example, Runwal Group is offering a 1:99 subvention plan, where the buyer needs to pay 1% now and nothing till possession. Similarly, Wadhwa Group and Rustomjee have come up with flexi-payment plans and price assurance schemes. for all their projects.
“Over the years, Akshaya Tritiya, because of its auspiciousness among potential home buyers, has brought impressive sales for the real estate sector. This year, developers are hoping to make the most of this day to ensure a spike in business, which has more or less remained tepid across the country, as a result of the lockdown due to the COVID-19 pandemic. These deals and offers will provide a compelling reason to close transactions, without visiting the site,” says Ram Naik, executive director, The Guardians Real Estate Advisory.
A matter of timing
Investing in real estate at this point of time makes sense, as the market is at a low due to the pandemic. Recent policy changes, such as the cuts in repo rate, have made home loans cheaper, as a few banks have passed on the benefits of lower interest rate to borrowers. However, home loan disbursements have not started yet, as the physical verification cannot be carried out by banks and will be done only when the government allows digital signatures, or when the lockdown comes to an end.
Read also : Housing sales likely to witness moderation in Q1 CY2019, owing to new GST rates: Report
[ecis2016.org] The 3-step guide to buying a home during Akshaya Tritiya
5 reasons to buy a home during Akshaya Tritiya, over other asset classes
Experts point out several reasons to justify why it makes sense to opt for real estate over other asset classes:
- Property prices are at their lowest point. Moreover, the market is less volatile now and prices are bound to increase gradually but steadily.
- It is easy to mortgage property and generate liquidity immediately, in times of need.
- Real estate can generate steady income, in the form of rent.
- Investing in property also has several income tax benefits.
- Gold, shares and other similar investment assets, are actually more volatile in terms of their market prices, in comparison to realty.
Cities that are attractive for property investment during this Akshaya Tritiya
Buyers should explore options, based on the size of their investment, expected returns and risk capacity. Big cities and metropolitan regions, require large investment and the returns are relatively lower, in comparison to emerging cities, where the investment corpus required is low and the returns are relatively higher.
The most attractive cities for investment in property during this period, are Mumbai’s peripheral areas, Pune, NCR, Vadodara, Jaipur and all the emerging locations where large projects, such as the Delhi-Mumbai Industrial Corridor (DMIC), are making a big impact. These cities are also attractive, because of the faster uptake of commercial real estate in these markets. This gives clear signs for firming up of demand for residential real estate, which typically lags the commercial segment by around one to two years.
Source: https://ecis2016.org/.
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Source: https://ecis2016.org
Category: Lifestyle
