After realizing the importance of real estate assets, people are going with more vigor for properties in Tier II and Tier III cities. Demand at the moment is strong and buyers should go for projects by trusted developers, says Mr. Prateek Mittal, Executive Director of Sushma Group.
What is the situation of queries post-Covid?
Queries have increased post-Covid as real estate has become the first choice of investment. During the lockdown people got time to prioritize their life and there they understood the importance of having their own home. Rents, obviously, are going up in the metro cities and during lockdown some of the tenants faced harrowing time.
People noticed the steadiness of real estate investment which can not only provide them with a roof over their heads but can also be utilized as an extra source of income. So, queries started pouring in during the lockdown; and with the announcement of Unlock, the sales have gone up and site visits have hugely increased.
Another trigger was the repo rate cut announced by the RBI that brought down the home loan interest rates. Analysing the previous years' trends, the repo rate in 2004 was close to 4.5%, and the real estate market flourished, in 2010 also the repo rate was close to 4.3% and growth was witnessed in the market. The repo rates touched the level of 8 to 9% in the years between 2011 & 2016. Now it has again come down to 4.0%, which is an indication for the real estate sector to scale up and a strong signal for forthcoming growth of the real estate sector.
Commercial properties are getting more attention as people have realized that they are a good source of alternative income apart from giving good capital appreciation. Things are easier for the buyers/investors as now loans are available for commercial properties by limited developers.
What a buyer should look for before investing in property?
Check the antecedents of the developer and notice the delivered projects of that particular developer. Another aspect to pay attention to is the kind of after-possession maintenance being provided by the developer. As people have realized the importance of owning a real estate asset which is the most safe and secure investment option and are opting for ready-to-move-in projects.
But the available inventory is not enough to meet the demand. Thus, it makes economic sense to go for under construction projects of trusted developers.
What is the current real estate scenario in Tricity?
The current scenario of Covid-19 has made people want to shift from rented homes to owning a home due to which the demand for housing is increasing. Apart from that, as the concept of reverse migration has come forward, this demand will increase further in Tier 2 and Tier 3 cities.
If we look at the supply in Chandigarh, there are only 31 months of unsold inventory whereas there is an average of 44 or 45 months of unsold inventory across India. It shows substantial growth in the realty market of the region.
Your comments on the movement towards tier 2 and tier 3 cities?
Talking particularly about Tricity's realty market, there is a lot of NRI population in neighboring states of Punjab & Haryana and Chandigarh is also emerging as a favourite destination for people coming back from other metros post-Covid. People with businesses will love to spend time with their near and dear ones living in smaller cities. The demand which was already on the up before the coming of this pandemic is likely to go further northwards.
Before the pandemic, many reports put out the figures of rising real estate Investments in Tier II at around 20 per cent over last year, which is a clear sign of the movement of buyers and investors to these cities. Indeed, the development of physical and social infrastructures -- airports, road infrastructure, better connectivity, companies foraying in these markets -- has pushed the real estate demand in these cities. Movement of businesses and employment centres, townships with mixed developments, etc in these suburban and peripheral areas are the main catalysts for the growing demand for commercial real estate.