Despite the negative effects of the pandemic on business and economy, investments in India's real estate sector have remained resilient. According to a Colliers India report, institutional investments in the Indian real estate market increased by 20% in 2022 to reach USD 4.9 billion, up from USD 4.08 billion the year before.
The Covid-affected real estate sector has been able to recover from the lows of the first lockdown, when quarterly sales (Q1FY22) had decreased by over 90% year-over-year, thanks to the low interest rates and incentives provided by state governments and property developers. For those who can afford it, the crisis provided an excellent opportunity to upgrade to a larger space or to diversify their investment portfolio by purchasing real estate at much lower prices.
The following are some of the main reasons for investing in upcoming real estate projects in India:
Rising Need
In the first two quarters following the initial wave of COVID-19, from October 2020 to March 2021, the demand for homes grew dramatically. The demand was fueled by a variety of factors, such as the reductions in stamp duty that were made available by a number of state governments, lower interest rates, and discounts made available by developers. The second COVID-19 wave, however, caused the pace to slow down in the quarter that concluded in June 2021. However, the opening of the economy, an increase in economic activities, and an improvement in the vaccination rate have all contributed to an increase in demand over the past few months.
Excellent NRI Investment Interest
With less uncertainty associated with the pandemic, increased transparency as a result of stricter regulatory measures, and superior foreign exchange conversion rates, NRI investment in the Indian residential market is anticipated to rise. The luxury, affordable, and mid-segment housing markets have all seen an increase in demand for ready-to-move-in units over the past year. Since the epidemic hit the country in 2020, the proportion of ready-to-move-in (RTMI) homes in all primary market housing transactions has climbed from 20% to 24%. Due to the dangers involved with under-construction homes, apartment buyers preferred completed buildings.
Need for More Space
The fact that the majority of businesses continue to employ a hybrid or home-based workforce is now abundantly clear. Online education has also increased buyers' desire for larger homes with more space, balconies, amenities, and integrated townships with walk-to-work, walk-to-shop, walk-to-school, and park options. Buyers don't mind living in remote areas with good connectivity as long as they get the best deal possible. This has led to development in newer places, and developers are profiting from it.
Is Now a Good Time to Purchase a New House?
If you've been thinking about buying a home, now is the right moment to invest in new real estate projects in India. Residential property prices are predicted to increase at an unprecedented rate over the next three to five years. As time goes on, affordability will become significantly more difficult. As the FY draws to a close, even developers are looking to boost sales, making it a buyers' market at the moment. The majority of banks' interest rates are also low. Buying a house for personal use is sensible, but not as much for investment. Given the high levels of inventory and the influx of fresh inventory, prices may not rise rapidly. Additionally, there are hopes that the upcoming budget will be beneficial to developers as well as buyers looking to invest in upcoming real estate projects in India.
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