Bullish on India's Real Estate Market, Invest Now With Mid-Long Term View for Best Returns

The real estate sector which is a significant driver of India's economic growth and forms the backbone of several other industries was under stress in the last few years, even before COVID-19 struck the economy and continues to be so. Markets were already near the bottom and the last five years saw the industry getting further impacted by reforms like Demonetisation, GST & RERA and undergoing significant consolidation.

Additionally, questions such as – if it is a right time now, at what price will the property be a good buy if one should look at investing in real estate — are worrying the potential buyers. The answer can be anything, but yes. At the same time, we have noticed an increased interest in real estate coming from opportunistic investors, end-users and NRIs. They are finding lucrative deals in a buyer's market scenario right now.

Real estate is undoubtedly one of the best investments one can make today. For it is not just an investment which appreciates over time but also provides the investors with peace of mind, a place to call their own and rental yields regularly. "The multifold benefits of real estate investing will continue to draw all kinds of investors to this asset class, said Ankit Maheshwari - Founder, Yes Property."

We do not see a scope of significant price correction, especially from the developers who are established and strong players unless the government introduces a reduction in circle rates which is unlikely. What may be seen and misunderstood for discounting by buyers is distress sales by a few developers with a high amount of debt or a crunch of liquidity. The fact that a significant price discount is not feasible is slowly getting factored in the buyer's mindset, and transactions are increasing. It's an instinct to delay big spending decisions during times of economic uncertainty. Doing this could cost buyers in the long run as sellers are more willing to make a deal now.

Our government has hit the bullseye by setting up the distress fund for real estate to aid in completing stalled projects, therefore, boosting buyer's confidence in timely completion and delivery of projects by developers. Few prominent state governments have also reduced stamp duty on affordable homes which can mean significant savings for homebuyers.

To the buyer's benefit, the banks have already reduced interest rates to the lowest in 15 years. The new average interest rate is as less as 6.9% and expected to correct further, with this the EMIs have reduced by 8% approximately resulting in enhanced loan eligibility. Lower down payment and flexibility of payment terms from developers on quality offerings can attract potential buyers. It is a no-brainer that those investing now in grade A properties at reasonable prices and with flexible payment terms will be gainers in mid-long time with a 3 to 5 years scenario. Investor's approach to real estate now should be similar to value investing or that of SIP. There are plenty of investment opportunities in real estate across India.

Post COVID-19 and lockdown, more prospective buyers are considering moving to gated communities due to the high level of security and safety. Investors and end-users and with a knack of identifying a good deal will benefit from their decision. When it comes to real estate investing, high-quality properties from a reputed developer at a reasonable price should be the first choice.