Should you invest in real estate at the current time?

Peripheral housing markets should do better since real estate has started recovering gradually from July 2020 onwards. Industry experts opine that this is a great time to purchase property since there is pent-up demand along with enticing discounts which may boost demand overall. The sector has done better along with recovering steadily over the last two quarters and should go to pre-COVID sales volumes in the next two quarters as per Kanika Gupta Shori, the COO of Square Yards.

She has stated that the affordable housing category will spur maximum growth and cities like Pune, Bangalore, Hyderabad, Mumbai and Delhi-NCR will witness a reduction in inventory with stability of property prices along with lower interest rates. She feels that this will drive higher sales figures while peripheral markets will keep performing even better since unit prices will tally more with people’s budgets and chosen sizes of units.

Experts have highlighted that yields from rentals have stayed the same while the drop in interest rates on deposits have made them more attractive currently. Experts have opined that the gap between interest rates and rental yields has come down and even with appreciation of just 3-4%, property investments will naturally be more attractive at present. Home loan interest and principal tax benefits may also reduce loan costs to less than 5% for those in higher income tax brackets. Property prices are also presently at their lowest thresholds which will draw more customers. Those with higher risk tolerance and the will to invest in commercial real estate should adopt a more selective method going forward.

Resilience has been steady for Grade A assets and collections in this space have come to 90% even amidst the pandemic. The vaccine is already being finalized for a launch and distribution in India and this will lead to further growth in the commercial office space category for 2021. REITs will also be suitable choices for getting higher investment benefits in real estate along with comparatively lower monetary investments as well. Both listed REITs have already seen higher rental collections that crossed 97% amidst the coronavirus pandemic.