As we are caught up in an unprecedented scenario that has captured the whole world in its grip. In these crucial times, triggered by Covid-19 our Housing and Urban Affairs Secretary Durga Shanker Mishra held discussions with 2600 leading real estate developers through video conference. These developers are a part of real estate body NAREDCO.

Several issues were discussed and here is the answer to our question that why it is an ideal time to buy a property post lockdown,

• To combat the crisis situation after the lockdown, special guidelines and regulatory measures for real estate across Mumbai and India will be issued soon which will benefit the customers as well as developers.

• In India, an investor or a property holder has to face short term and long term gain. A property holder has to reinvest, pay tax or sign up for government bonds to file for capital gain by July end. On 24th march, our finance minister Nirmala Sitharaman announced that the fiscal has been extended till June 30th offering some relief to property holders with capital gain account.

• HDFC Chairman Deepak Parekh said, real estate prices in the country would drop by up to 20 per cent (according to NAREDCO it is expected to be 10%-15%) in the coming days due to COVID-19 outbreak and the resultant lockdown. For potential future home buyers, who have job security or cash flows, it will be an excellent opportunity to buy properties at lower price.

• As the value of Rupee in the International Market as compared to the Dollar is going down, NRI’s will show great interest in the Indian market and lots of FDI will come into picture

• RBI announced that from 28th march, Repo rate will be reduced by 0.75% and the new base rate is 4.4%. This was done in interest of home buyers and people taking loan as this will reduce the interest rates on loan by 0.75%. Thus people planning to buy property will now show more interest.

• Unlike stock market Real estate in Mumbai for property holders and home buyers is not paper money, this is the asset you can hold tangibly which increases its reliability and return on investment. In this Covid-19 situation many people across the globe understood the importance of having their own property.

• Due to low demand, investors and property buyers in Mumbai will get opportunities at discounted rate but once the economic condition will start settling, the bargain will reduce and demand will also start floating upwards.

• As compared to other financial assets, real estate in Mumbai can take 2-3 month’s time to liquidate but in this time you can use your property or enjoy its rental income. Even in the worst scenario, you will see a very slight marginal dip in your asset value unlike equity market.

The Bottom Line:

We at Urban Space Realty feel that Real estate might face a downfall in coming 4-6 months. But as rightly said “hit the iron when it’s hot”. We feel it is the right time for an investor or an actual user to buy a property in MUMBAI. As the volatility in the equity market is unprecedented, a property in the real estate segment will be the safest bet.

For any further assistance or information you can contact us on sales@urbanspacerealty.in or visit our website www.urbanspacerealty.in

We are an experienced Real Estate firm for more than 3 decades.

This article has been prepared by Aakash Shah, Partner of Urban Space Realty. Please note that these are the personal views of the impacts of COVID-19 on Real Estate. You are advised to take opinions of other experts if needed for the above mentioned guidelines. We are not responsible for any reliance placed on the content mentioned above.