Real Estate Remains Preferred Asset Class For Investors In This Pandemic

The real estate consumer remains positive with regard the economic scenario and income stability for the coming six months. Real Estate Remains Preferred Asset Class For Investors In This Pandemic. According to ‘Concerned yet positive – The Indian Real Estate Consumer (April – May 2020) a report jointly released by National Real Estate Development Council (NAREDCO).  Real estate (35%) is still perceived as the preferred mode of investment, followed by gold (28%); Fixed Deposits (22%), Stocks (16%); and home-buyers are likely to slowly return to the market in the coming six months.

Price-points of residential realty have remained muted for the past few years, but are still a key deterrent, with the perception of being still un-affordable. This was the response from nearly half of the potential home-buyers surveyed, who are currently staying in rented accommodation.

A majority of respondents surveyed (73%) comprise ‘first time home-buyers’, who are looking to buy a ‘ready-to-move-in-house’ for end-use and are from the age group of 25-45 years. While 60% of respondents opined that for the next six months, they would prefer a ready-to-move-in property, 21% said they were okay with a property with a delivery timeline of maximum one year.

The survey was conducted in April and May 2020, through a random sampling technique for a fair representation across regions. The insights presented in the survey entirely represent the view of more than 3,000 potential home-buyers.

Going forward, NAREDCO believes, real estate will be ‘positive’ for both end-users and investors in the post-COVID-19 world. Those living in rental homes have realized the importance of being in their own homes while NRIs facing challenging times in their present domiciles are looking at creating a safe haven ‘back home’ in India. Demand for additional space for home offices is on the rise, with need for more efficient layouts. The importance of common amenities, business centers and more open spaces will be an inherent part of the new demand criteria in the post COVID-19 world.

“NAREDCO survey clearly shows that potential home-buyers who were searching for flats have pressed a pause button for the time being because of liquidity concerns and uncertainty over the COVID pandemic. But, a majority of them will gradually start returning to the market in the coming months.”

“This survey has established again that credible developers and ready to move in or nearing completion properties are preferred by prospective customers, who are largely end-users. With the significant correction in stock markets and the continued volatility, it is not surprising that real estate has become the top choice as an investment asset class,”

“While the sector re-calibrates the approach to stay afloat in these challenging times, we are moving towards a more digitally inclined world. The overall behavior of the consumer has changed to save more, spend less and invest smart model.” Real estate has always been less volatile as compared to share markets making it the safest investment available.

The preference of this new age home buyer has also changed owing to the crisis and it is imperative for builders to adapt to new technologies that will ease the entire home buying process. The delved into the renting predispositions of customers and majority (47 per cent) of the consumers opined that they would want to buy a house but see it as an expensive proposition. However, they would be motivated to purchase a house for self if it is rightly priced.”

Home buyers are likely to slowly return to the market in the coming six months as real estate is still perceived as the preferred mode of investment.