With 2020 being the year it has been, maintaining the status quo and floating above water seems to be the priority for most. Therefore, it's extremely natural in such situations to be hesitant to venture into something new or think about future growth. Such is the case with the real estate industry too. This year has brought a lot of ‘apprehensions’ that people might have about investing in real estate.
While these doubts come from the right place and seem logical, the ‘realities’ of the real estate industry today are actually quite different. This is probably the best opportunity and time to venture into real estate.
So, while it’s important to consider and analyze what people might believe about the industry in the light of the pandemic, we also have to understand how the reality really differs from it!
Our Apprehensions about the Industry
1. Dwindling Funds
- The economy took a big hit during the pandemic. A lot of people lost their jobs and those who didn’t, at least got shaken on their idea of job security.
- It’s natural to be apprehensive about investing, especially in real estate, an industry that is usually thought to be suitable for people who deem themselves as financially stable.
- Saving funds, rather than spending a chunk of them on a property, obviously seems more like a natural choice during such times.
2. Fluctuating Values
- Months long lockdown led to a lot of businesses shutting down and people evacuating rented spaces, both residential and commercial.
- It’s a probable assumption that the value of properties is going down and the owners will ultimately take a loss. An already hesitant buyer would naturally think twice before a real estate venture under such trends prevailing in the market.
3. Digital Transformation
- Real estate industry is often built on the idea of the human touch at site visits, meetings with brokers, builders, etc., and while sitting across the table to close deals. These face to face interactions and deliberations are considered extremely important but unfortunately, are not possible in the normal sense anymore.
- People sitting in different cities due to the ‘work from home’ situation, looking to invest in property elsewhere, will find it uncertain to make these transactions virtually.
The Truth about What’s Happening in the Industry Now
1. Low Interest Rates
- The economic downturn has lowered the interest rates on home loans, to the lowest they have been in 10 years, making it much more lucrative to apply for home loans.
- It is much easier to secure funds and invest in real estate during this time. You can be more financially capable to dabble into real estate in 2020, than you were at the same time last year.
2. A Renewed Perspective of Value
- While COVID-19 has closed the doors of businesses for some time, it has also made them realize that they may need new and altered spaces to operate in the post COVID world.
- The new safety norms will require various adjustments and additions to the workplace as well as larger areas to accommodate social distancing rules.
- These circumstances will lead to higher real estate sales as well as more profit to the investors in such properties. Thus the return on such investments will increase in the ‘new normal’ world, contrary to what one might think.
3. Digital Transformation
- Due to impediment of physical interactions, developers and brokerage firms have re-aligned their businesses to digital platforms.
- At a time when people are adopting the online way of buying every commodity, real estate stakeholders are upscaling their online presence, a much needed advantage for prospective home buyers.
- Most of these builders and intermediaries are integrated with leading banks that enable paperless sanction of home loans. Through these digital platforms, home buyers can complete the entire home buying cycle from the comfort of their home.
So, while 2020 has brought along a lot of hardships and new adjustments in all sectors of life, a silver lining can be definitely found for the people thinking about real estate investment.
What you need is an open mind, a correct understanding of the present reality, and just a little bit of help. We, at Blockrise, would love to be that guiding ray of light for you. Let us help you turn this year around and we’ll ensure that you make a bang for your buck!