Property investment refers to the purchase of a property for the purpose of ownership or gaining returns on it. This may be done by either improving the property or selling it, or by renting it out. This is usually considered to be very profitable. But with the effect of COVID-19 on the global economy, several industries across sectors are experiencing uncertainty on what the future holds.
However, if you are keen on investing in real estate but are on the fence, you can rest assured that real estate will continue to be a safe option post-COVID-19. Understanding the different factors that contribute to this can help provide clarity.
Increased number of buyers and investors
The economy during COVID-19 has taken a hit, and with businesses impacted everywhere, stocks have dropped drastically. This has led to an increase in the number of investments as the prices are at an all-time low, and property investment is more affordable. Moreover, the number of homebuyers has not declined during COVID-19 in . This trend will carry on, even over the course of the next several months, as different cities see the lockdown lifted. In order to increase consumer demand in the market post-COVID-19, interest rates and prices will remain low. These favorable conditions will make property investment a top choice, even more so because the potential for strong negotiations will also be possible.
Long term assets
The world has seen epidemics and recessions before as well and has always managed to bounce back from the decline. Market volatility is short-term, so investors with long-term assets need not worry. Moreover, any investor knows that long-term investment, like commercial property investment, is more favorable than a short-term one, as they generate higher returns. Buying rental property in Bangalore even after COVID-19 will remain lucrative for this reason.
NRIs can leverage devaluation
For NRIs, sometimes the best real estate investment opportunities appear when things are most uncertain. The Indian currency has witnessed devaluation like never before, and NRIs investing in real estate can actually stand to benefit from this greatly. With the decline in the rate of the Rupee, citizens abroad will find the real estate market cheaper than before and can leverage this as the economy reopens gradually throughout COVID-19 and after.
Uncertainty prompts action
During this lockdown and pandemic, many have experienced uncertainty with regard to significant aspects of their lives. For some, it has been about their job security, and for others, it has been about living in rented accommodations. Because of this, the questions regarding occupancy vs ownership have risen. But many have realized the importance of real estate investment as both a source of income, as well as a means for safe shelter. Buying a rental property and leasing it out can guarantee a steady stream of earnings, which makes it a promising investment. Property investments also ensure security with regards to housing arrangements in comparison to rental agreements.
Appreciation of real estate
Real estate continues to appreciate in value with time, and the best real estate investment returns are generated when the property is maintained and cared for. This can be taken a step further by redecorating the house. Interior design styles are always trending, and the look and feel of a home play an important role in the value renters or buyers give to a property. Therefore, buying a rental property does not have to end with the purchase, renovating the house can help increase the appreciation of any real estate.
The real estate sector plays an important role in the economy and public welfare. Which is why government may step in to help drive growth with certain initiatives. Governments may also offer grants or aid when the real estate sector isn’t performing too well. One example of this is the tax-saving benefits that can be leveraged by first-time home buyers. Moreover, the government of India has also set up committees throughout the country to reinforce and protect buyer rights and ensure the timely delivery of completed housing. This committee is known as the Real Estate Regulation Authority. These resources can be leveraged to bolster your commercial property investment or housing deal.
Certain cities see better growth in terms of property investments. This is because of the exponential growth they witness and attract. A prime example of this is Bangalore. The city is the startup hub and IT capital of the country, which is why it has been deemed the Silicon Valley of India. Companies and people will continue to migrate here for the sheer number of opportunities. Since land is limited in metropolitan cities but the opportunities continue to grow, the demand for real estate will continue to go up in the long-term.
All these points make it clear that real estate is a safe investment option, and will continue to be post-COVID-19