Why should you purchase property during COVID-19?
There are various reasons as to why people desire to have a home of their own like a stable place to live, the proud owner of an asset, long term investment, and many more. Maximum people have an emotional side to having their own home. Purchasing an affordable home in a city is a challenge. Various factors influence the decision of buying like location, infrastructure, basic amenities, and price. Among all these factors the major factor that influences the decision making is “price”.
The pandemic has now changed the perspective of potential buyers; many people were forced to move out of their rental apartments or hostels. This made them realize the importance of owning a home. Owning a property is now becoming a priority for end-users.
It may not always be a good time or opportunity to purchase a property. There are very few situations in which one can afford the house prices. Due to pandemic COVID-19, the various industries and sectors are affected adversely including the real estate sector. According to a survey, the property rates in metro cities have fallen by 2-9 percent. This is a good opportunity to purchase a property to buyers.
5 Reasons to purchase property during COVID-19 –
There are many relevant reasons to purchase property during a pandemic such as –
Stable Investment – The unexpected outbreak of COVID-19 created chaos in the stock market and mutual funds. The stock exchange of the country had been in a vulnerable position. The unpredictable behavior of the stock market caused investors to find a way to for stable investment and real estate is the best stable investment in the long term it provides high return as compared to the stock market without much volatility.
Reasonable Price – It is the best time for buyers, especially end-users, to purchase the property at a reasonable price. Since pandemic hit the global market potential construction changes and delays in construction played a major role in bringing down the house rates at a reasonable price. There is a huge probability that end-users will get a deal at a price which they can afford.
Auctioned Property – Many people lost their jobs, suffered salary cuts and those who earn on a commission basis, currently have no source to earn money these caused default in loans for those who had taken houses on EMI. Although RBI asked banks to offer a three-month payment moratorium the situation has not been improving. So when a borrower default loan banks seize the property and sell it in an auction, prices in the auction are 20% to 30% lower than the prevailing market price.
Reduction in Repo Rate – Reserve Bank of India RBI has reduced the repo rate 25 basis from 5.75% points to 5.15% due to the ongoing recession caused by the pandemic. The fluctuations in the repo rate can directly influence the high ticket loans like home loans and business loans. Thus, home loans, for now, are available at a low rate of interest; end users can get the loans easily to purchase their property as it is available at a cheap rate.
The benefit of Government Policies – The Government of India has extended the Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (PMAY) for the middle-income group up to March 2021 further strengthening the affordable housing prices. Under this scheme, families with an annual income (household) between Rs.6 Lac to Rs.18 Lac will now get a benefit for another year, subsidy up to Rs. 2.35 Lac on their approved home loans.
Real estate market does not yield returns immediately; it is an illiquidity asset but is stable and invulnerable as compared to the stock market. Therefore, it is the first choice for those investors who wish to invest in relatively safe long term investment. On the other hand, owning your own house is a dream of many people.
The above-mentioned reasons specify that now is the ideal time to purchase the property at an affordable rate. Furthermore, you can purchase property to generate rental income as many people lost their rented homes due to pandemic. Purchasing a property is a risk but a calculated risk.
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