The ongoing pandemic made everyone realize the importance of owning a home and it did affect Namma Bengaluru’s real-estate in a big-big way. The zero sales during lockdown was unavoidable. But once the market opened up, the inquiry levels picked up and so did the demand.
According to a Consumer Sentiment Survey by ANAROCK, Bengaluru was among the most preferred cities as about 82 percent of the respondents had booked their homes either during the lockdown or just before it. It further states that 48 percent of respondents preferred residential real estate as the best investment option during the pandemic (Covid-19) against other asset classes mainly due to lower risks attached. Also, 54 percent of respondents considered ‘now’ to be an ideal time to buy a home as they have the opportunity not just to negotiate a good deal but also get home loans at all-time low-interest rates.
Bengaluru led the way with the maximum number of units launched compared to Mumbai, Hyderabad, Chennai, and Kolkata in Q2 2020 with a share recorded at 49 percent of the total new launches. The Confederation of Real Estate Developers Association of India (CREDAI), Bengaluru, says the demand for residential in the affordable segment is picking up with serious buyers venturing out. While other cities are looking at discounts on real estate prices, Bengaluru has not seen any price reduction in any segment. CREDAI chief says despite the unavoidable crisis, the city’s real estate will recover sooner than most other cities.
Bangalore real estate market is set to revive and flourish its way through 2021 with the addition of new projects, as sales are anticipated to recuperate. The following are the major reasons why Bengaluru navigated through the pandemic and how real estate is emerging stronger in the new normal.
- Stamp Duty Reduction
On the stamps and registration front, the Karnataka government’s timely decision to cut the rates from 5 percent to 2 percent for properties costing up to Rs 20 Lakh, and 5 percent to 3 percent for properties priced between Rs 21 Lakh and Rs 35 Lakh came into force just when the pandemic was at its peak. Stamp duty reduction aimed to boost the volume of property registration, also aid the property buyers during the pandemic time. The move from the government brought in an optimistic sentiment for properties with stagnant prices and unsold inventories.
- Trusted Developers
Prospective homebuyers have bestowed their trust in real estate brands that showcase transparent and ethical dealings. The advent of RERA is bringing about business transparency even during these challenging times. Along with Indian nationals, the NRI class has also communicated a great sense of interest in Indian real estate with trusted developers across different markets.
- Digital Home Buying
Unexpectedly, though the lockdown did cause inconvenience for the people to physically visit sites to make their final home buying verdicts. Here, digital platforms came at the forefront and helped in engaging customers proactively. This is a shift that is going to take a commonplace in the future.
Developers have now given the homebuyers the joy to sit at home with their family and virtually visit the properties they seek to invest in. Along with leading developers, a lot of local developers in the city have adopted the facilities of virtual tours, online payments, digital signature, and video conferences to allow digital sales during the crisis.
Furthermore, these situations have proved out to be ideal for NRIs to invest in the city’s realty market. This pandemic witnessed a lot of NRIs lured to investing in Bangalore’s real estate.
- Low Home Loan Interest Rates
The reduction in interest rates has paved the way for prospective homebuyers to invest in properties of their choice. Certain banks are offering minimum interest rates as low as 6.70%.
- Strong Connectivity And Infrastructure
While investing in a property, one considers long-term investment in the location. This is exactly what defines the real potential of Bengaluru’s real estate market, which is set to grow in multiple areas owing to its imminent infrastructure. The proposed Outer Ring Road, a major roadway, will run around the perimeter of the city and connect all the major highways around the city. Along with this, the upcoming metro lines and the extensions of the existing metro lines, will decongest the roads and cater to the current traffic issues of the city. The robust connectivity and infrastructure of Bengaluru make it a hotspot for real estate investments.
- Tax benefits
People will now take advantage of tax benefits on affordable housing and private investment formats such as REITs appreciations to the budget 2021. For home buyers, the decision to extend tax exemptions and interest reductions on home loans till March 2022 is a welcome move. Furthermore, tax deductions on affordable rental housing formats boost migrant workers’ access to housing. The finance minister also took measures to make private investment formats like REITs fully available to the general public by removing TDS exemptions. When this is combined with the proposal to include foreign portfolio investors, private participation in the real estate market is likely to expand.
The pandemic phase has, certainly, provided an opportunity for home seekers to buy their dream homes. Bengaluru has already picked up good in their real estate market, as things slowly get back to the status quo, it is set to emerge stronger in the new normal.