Authored by Vikas Chaturvedi
Real estate has witnessed multiple highs and lows over the years; however, it is the pandemic that was one of the most impactful events for this sector. The reason for this inference is that although COVID-19 initially came as a massive blow to real estate, it also provided an opportunity for businesses to bring pathbreaking changes to their work strategies and serve their customers more seamlessly than ever before.
As these changes take effect, one notices that real estate is emerging out from the distress to survival to recovery mode and will hopefully move towards a profitable path in the months to follow.
Initially, most of the consumers were unsure of finalizing property deals as they waited for the right opportunity during the lockdown and have been delaying it further due to the uncertainty associated with the on-going pandemic.
However, if one very clear learning that has been established now is the importance of homeownership and why it is the best time to invest in this lucrative asset class.
The advent of proptech solutions
The sector that primarily faced multiple challenges in the form of construction delays, stalled projects, liquidity crunch, etc. in the wake of nationwide lockdowns, is gradually shifting its gear and steering towards normalcy by leveraging digital solutions.
Already Prop-Tech has been playing an important role in the areas of construction & facilities management, but the paradigm shift is happening on the Marketing & Sales front. Innovations like virtual walkthroughs, online marketing strategies, use of AI/ML etc. are helping customers find properties that precisely suit their needs, and much more. Today no real estate company can operate without having a digital footprint and consumer interface.
As prospective and first-time buyers experience their favorite properties in a digital setting, they come to know the real benefits these platforms offer. For example, the instant sense of ownership, time and cost-saving factor increased convenience, etc.
All these aspects make virtual property visits attractive to customers, while also saving them from the tiring physical visits. With more and more customers familiarizing themselves by experiencing these solutions, interestingly the perception that properties can’t be sold online is also changing.
The emergence of lucrative deals
Among the top challenges that realty developers face are inconsistent sales leading to large inventory pile-up, diminishing cash flows and cost overruns. To tackle them, today developers are rolling out innovative deals and offers to customers. Some of them include cashback schemes, more comfortable EMIs on loans, refundable booking amounts, attractive price propositions etc.
The government has also triggered positive consumer sentiment by reducing stamp duty charges. Three key elements of home buying i.e. Home prices, loan interest rates and government taxes of the property are today at their lowest ever levels.
We have always seen and in fact, believed that home buying is the biggest expense. Consumers of the earlier generations even took the savings of their lifetime to buy their dream home.
However, that’s not the case anymore! Not only COVID-19 has made people realize the value of having a house, but it has also turned this dream into reality, with developers offering a plethora of attractive propositions nowadays.
Increasing demand for ready-to-move-in (RTM) properties
One more interesting development has been the trend of consumers now considering RTMI property as a perfect alternative. What makes this a lucrative option is a combination of other beneficial factors such as all-time low home loan interest rates and No GST.
Moreover, RTMI property also offers additional benefits such as easy and quick loan processes, no delays and most importantly, you pay for what you see. RTMI is becoming a great choice, especially for those urgently seeking a home and find EMIs better than paying rents.
Looking at realty from a commercial standpoint
While COVID-19 has closed the doors of businesses and pushed them to work from home, it also made them realize that they may not need large spaces anymore to operate in the post-COVID world.
As social distancing will be a strict practice in the following years, most employees may continue to work remotely, with businesses operating with minimum workforce only. This transition will only increase the scope for co-working with more and more companies moving out and looking for flexible workplaces in the new world order.
Similarly, to ensure compliance with social distancing norms at the workplace, organizations will need to increase their office spaces from 80 sq.ft. per employee to 120-130 sq.ft. per person. So, organizations that prefer quality spaces will shift to large tech parks and campuses.
A great benefit of this shift is access to facilities such as periodic disinfection of buildings, visitor tracking, thermal scanning of employees, etc., which employers otherwise would need to manage independently in the case of standalone buildings.
What lies ahead?
The combination of all these factors clearly shows that positive consumer sentiment is coming back in the current realty market. With new technologies used by realty platforms, which simplifies the overall process of searching and buying properties, investment in the sector becomes easier and more convenient.
On top of that, the introduction of numerous government relaxations in the wake of COVID-19 makes property buying more lucrative in the current landscape. Even if you are not interested in purchasing a home for living, you can buy it from an investment perspective.
So, why wait for the right opportunity when your timing is just perfect for investing in the realty space?
Vikas Chaturvedi is CEO of Xanadu Group
First Published: IST