If there is a word that can aptly describe 2020, it’s “unpredictable”. This is a year we want to forget but won’t forget. We are living through a pandemic that has changed the picture of normality, the essence of survival. We had to forgo handshakes, friendly hugs and evening gatherings. And all we can do now is to keep buying time to make the right predictions of what the future has in store for us.
We are living in a puzzle, called the “new normal”; tough but solvable. But at the moment the pieces are in a heap. The situation is same for every sector and business community. Real Estate is no different.
For the record, the pandemic has put the real estate sector in another battle for survival; a battle that saw its traditional business bastion being uprooted and thrown into the whirlpool of another renaissance. While this has affected everyone, from real estate developers and agents to homebuyers, investors and entrepreneurs, the only prudent solution left with us is to swing with the evolving trends, play the cards cautiously and release the aces at opportune moments.
Trends ruling the real estate charts
Work from home is not a stigma anymore and home is the new office now. The success of remote working has led corporate businesses to declare it as a norm. This has affected people lifestyles and psyche and forced them to think of liveable settlements. The decision of moving to a city, get a small apartment and avoid the daily commute is no longer valid. Quality of life in the suburbs sounds more practical, and living opportunities there are now the most sought after.
Bigger and spacious homes are the new vogue in homebuying. Living spaces that come with personal green decks, wide balconies, and plenty of air and sunlight have stoked the interest of homebuyers. Also, looking at the work-from-home etiquettes, extra office space is a necessity now. Health amenities and hygiene standards are also factored in while choosing a home.
Homebuying is better than renting for most people now. Looking at the way the pandemic is heading, many renters have started visiting online real estate platforms to book homes. They want to forgo the hassles of dealing with landlords and live life independently. Young professionals who had earlier chosen the rental route too have entered the housing market, lured by attractive pre-payment offers from realty players. The low-interest rates and drop in stamp duty in some states have also fuelled their intentions.
Demand for affordable homes has shown an uptick in transactions as people want to leave their dingy accommodations and live in well-planned townships that have all facilities to keep themselves safe and healthy. Existing ready-to-move inventory is selling up fast and new housing projects are being readied for launch by all real estate developers. Realty players are changing their blueprints to make homes more spacious to suit the expectations of homebuyers.
How should homebuyers look at this pandemic?
For first-time homebuyers, the pandemic is a never-before-seen opportunity for buying a nice home. The positives are all on the side of homebuyers-low interest rates, property price corrections, reduction of stamp duty, and attractive pre-payment plans from realty players. This tranche of goodies is enough for homebuyers to pounce on the opportunity of owning a property.
So, if you find a home that suits your tastes and you have job stability, then ink a deal. Remember with stocks and equities melting in the wake of the pandemic, real estate is the only asset that you can safely put your money in, sit back and watch its value swell.
What about investors?
For investors, this is a unique opportunity to scoop up properties at low prices and finance them with low-interest rates. Residential and commercial real estate markets that have suffered significant contraction during the pandemic and are poised for a good recovery looking at the uptick in demand are good spots for long-term investment by investors.
Investors looking for a diverse portfolio should look at Real Estate Investment Trusts (REITs) and direct purchases as favourable options. REITs were previously undervalued, but they have performed well during recent times and will stand to gain during a post-Covid recovery.
What’s happening for Realty developers?
The real estate market is again headed for consolidation and bigger realty players with sound balance sheets are well set to gain huge market shares in the coming months, leaving small players out of the equation.
Looking at the success of digital home sales, real estate developers will be looking to finetune their digital platforms by leveraging innovative technologies, to bring more convenience in online homebuying.
With the government allowing 100% FDI for stressed real estate projects, real estate developers can heave a sigh of relief and make use of foreign funds to complete their projects and release them in the market. Since loan moratoriums are coming to an end, real estate developers will need low-interest rates for the availability of loans.
How are entrepreneurs and business owners doing?
For entrepreneurs, this is a tough time. But as always, they should focus on the opportunities that arise, which in this situation will come and that can be once-in-a-lifetime one.
As of now, monitoring costs and getting as lean as possible while keeping an eye on the balance sheet is the mantra for every entrepreneur. Quick decision making and communication with customers at every point of the sales journey is what business owners are looking at. Reaching out to customers during these troubled times will bring an emphatic value to brands.
When it comes to surviving the market forces, innovation should be brought in every aspect of the business. Technology was a find during this pandemic. So, we will see more investments in proptech and similar digital tools in the months to come. Upskilling of teams across departments to help them deal with such headwinds in the future has also become the focus of every business. Overall, business owners are looking to stay united and work in a holistic fashion to survive this change.