Corona Virus outbreak impact may expect any reduction in property prices might be disappointed as property values, if anything, are likely to show an upward movement in the post Corona virus market, based on several factors.
RERA Licensed Real Estate Agent in Hyderabad
If a demand slowdown has been keeping price growth in India’s residential real estate market in check, the sudden Corona virus outbreak, which threatens to drastically impact global economic growth as countries extend nationwide lock-downs to contain the spread, would wipe off any chances of value appreciation in the property market. As it is, the nine major residential markets in India registered only negligible price growth in the past half a decade amid consumer sentiment hitting.
In Corona Virus outbreak, Cost of supply materials to increase
Projects delays are on cards as supply of building construction materials that India exports from China is hampered in the wake of the pandemic. The impact of the situation would be more prominent on premium-luxury housing projects which rely heavily on supplies of fixtures and furnishings from China, the country where the source of the contagion has been tracked down to. The time gap will not only delay housing projects but also ultimately increase the overall cost of project building since builders here will have to rely on alternative sources to meet their building requirements.
Interest rates to fall, home-buying to become affordable
The RBI has reduced the repo rate to 4.4%, consequently making borrowing cheaper for home buyers − home loan interest rates are already as low as 8%. Further reduction would act as a booster for buyers to invest in property at a cost advantage once clarity on the impact of COVID-19 on the job market is achieved.
While the government has already extended the benefits offered under Section 80EEA till March 2021, it might also consider extending it further in order to give a boost to first-time home buyers. Experts are of the view that anxiety over impending job loss among consumers is likely to persist even after the worse is over and normalcy returns. The government will have to continue extending support till that period.
