Despite the serious pressure caused by the COVID-19 pandemic on the financial markets, there’s quite an interesting thing that has come to notice which displays that no chief market has shown any considerable dip downs on the price graph in the period of October-December 2020. The pressure has effectively affected the Indian real estate markets, the average prices of newly launched flats in Pune continue to stick to their earlier numbers, as concluded from the data collected online. According to the data from a real estate website, the mean rate of properties in the top real estate markets like Mumbai and NCR depicted plain growth in the October-December period of 2020 as compared to the numbers observed in the same time of 2019.
At this point of time, which can be said to be of a lot of importance, the average prices of new 2 BHK flats for sale in Pune have registered a positive growth of around 4% in Pune over the last year. The rise in prices is predicted for the upcoming quarters as well on account of the efforts of global organizations to recover the country’s economy. The muted but steady growth in the rates of properties along with many other aspects has together increased home affordability for home seekers in India to a huge extent. Relatively lower returns may turn out to be hostile for an investor’s soul and affect the NRI investment volume in the nation.
The housing affordability in India is getting a kick start with the supportive actions taken by the state governments like the Delhi authorities have declared a 20% deduction in the circle rates for all kinds of housing properties for the time being. This step can remarkably pull down the property rates for homebuyers in the country’s capital, especially in the luxury housing segment.
Effect of COVID-19 on prices of flats in Pune
Suppose a go-slow in the demand for new projects has been maintaining the rise in prices in India’s housing real estate, then the coronavirus situation that portends to exponentially affect the global financial growth, will simply clear off any possibilities of price appreciation in the market. In the close future, expecting a drastic value appreciation for 2 BHK flats in Pune will be termed as nothing but ambitious thinking.
Why is there the least chance of property prices going down after the COVID-19 unlock process initiates?
After the word from the union ministry came in, the real estate builders and developer’s community in India has been left in a fret as they were urged to sell off their unsold property stock at reduced rates and let the high prices go. The government said that some concessions may be offered to buyers seeking flats in Pune in circle rates to take some stress off their shoulders but builders must be willing to reduce prices for that to happen.
There is not much point in holding the unsold stock while waiting for the market to improve because selling off the flats in Pune is the best bet for buyers and sellers. Homebuyers have become the fence-sitters for a long time now which has eliminated any slight chances of profit-making for many builders and the origin of liquidity is drying up with the ongoing banking and finance companies’ crisis.
The cost of raw material has gone up
Project delays have been on paper as the stock of building construction materials that India imports is disturbed due to the wake of the corona pandemic and the awakened pressure amongst different countries. The effect of this entire situation is more prevailing on elite & luxury 2 BHK flats in Pune that depend too much on supplies of high-quality fittings & fixtures that are imported to India.
The delay in deliveries of the imported material will not only increase the time gap but it will also push the overall cost of erection of residential buildings as the builders have to depend on optional choices to meet the raw material requirements. The Make in India initiative may get a push with this tough situation in the long run but builders of flats in Pune have to go through the short-term pains, which is inescapable.
Record low-interest rates for home mortgage loans to increase affordability
Home loans have been touching the lowest line which has made borrowing reasonable and encouraging for home seekers to invest in 2 BHK flat in Pune at a cost-benefit, all that will come into the picture once the consequences of COVID-19 on the employment sector are known.
The anxiety would be persisting among customers who have lost their jobs even after the normal conditions are retained after the coronavirus is eradicated. Still, some price correction is predicted from the real estate developers’ half to support the cheap home loans step in a weak employment market. Investors may buy more if there was some price reduction and tenants are ready to move-in appropriately priced flats in Pune properties. The tenants who are not currently in the position to buy a property at this point due to the prices or jobs have also admitted to buying a property in the coming 2-3 years if the current real estate market scenario persists.
Stamp Duty Rates Correction
To encourage buyers even more in the buying sentiment and cut the net cost of buying a home for buyers, certain state governments have also declared reductions in the stamp duty charges, in the reverberation of the pandemic situation. Most of the state governments like Madhya Pradesh, Maharashtra, Karnataka, etc have decided to reduce the prices of stamp duty on flats in Pune, applicable for the next six months at the moment.
Thus, due to all the above factors, there is a steady increase in the property rates of 2 BHK flats in Pune resulting in considerable price correction. Expecting more price appreciation in the future is not a bad idea, the present condition is also a great opportunity to invest their money in this market situation.