Real estate space is buzzing again

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The real estate market has been in a slump for a few years. The pandemic, however, has triggered demand for bigger houses, which faced budget constraints earlier. Now, however, with more household savings, price correction and low home loan rates, fence-sitters are coming forward looking for spacious units. According to a report by PropEquity, inventory levels have hit a decadal low across the top seven cities, suggesting an increase in demand.

As work from home (WFH) is turning into a norm for some sectors, there is a pick-up in demand for WFH-compatible dwelling units. Moreover, with price correction in few real estate markets in the country, this could be a good time for buying a property, especially for the purpose of self-occupation. According to estimates, there has been up to a substantial reduction in prices in some cities, offering people good options in both ready-to-move and under-construction houses.

Discretionary expenses have come down substantially due to the pandemic. Household savings have increased which people are ready to deploy in real estate and stock markets. Data shows the Nifty Realty index has already outperformed the Nifty50 index with a 26% jump since the beginning of this year. Nifty50 had a 15% leap during the same period. Realty stocks have given more than 100% return, indicating a pent-up demand in the realty space.

Another incentive has been the decline of stamp duty by state governments such as Maharashtra, Karnataka, and West Bengal. Combine this with low home loan rates and the price correction making it the most appropriate time to purchase a home.

With buyers again looking towards the real estate market, the key lies in not fooling the customers this time around with builders delivering projects on time without compromising on quality. Most important, they should not let demand-supply mismatch go out of hand as in the past.

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