What Factors are Driving Real Estate Investments in 2020?

By : Sarika Aggarwal

20 November, 2020

While the COVID-19 pandemic has affected almost every sector, the real estate sector is one of the worst-hit among them. Property sales have witnessed a decline all over the globe. The Indian real estate sector entered tough times with investors being sceptical about buying properties. However, the situation is now expected to improve, with several factors driving investments in the sector.

The pandemic caused stock markets to crash, thus leading to the investors suffering huge losses. The stocks are currently quite volatile and not very reliable for investment purposes. At such a time, investors are finding real estate properties to be safe investment assets. Real estate properties being tangible, they reassure the investors with the sense of owning something real. Moreover, they can generate rental income steadily as housing is constantly in demand.

In order to combat climate change, the Government of India has been emphasising on sustainable projects. Even during the pandemic, the government has continued to urge developers to come up with green living facilities and other eco-friendly features. Sustainable projects receive various types of assistance from the government, thus helping the builders complete and deliver the projects faster. This, in turn, builds up the confidence among homebuyers as they have to worry less about problems like delayed possession.

One of the most important factors driving real estate investments this year is that properties have become more affordable. In order to boost sales, many of the developers lowered the prices or came up with offers like cashback policies, free benefits, etc. The government and RBI have also worked on making housing more affordable. They have taken several steps, the most notable among them being the slashing of home loan interest rates and stamp duty charges. Evidently, the investors are seeing this as a great opportunity as they can get the same lucrative returns by investing less.

The demand for housing has also shot up among end-users during the pandemic. For a few years in recent times, the traditional mindset of owning a home being a priority was replaced by one focused on renting. Millennials considered rental accommodation to be cheaper than buying a home. However, with rising land rates, renting homes has become expensive in the long run. At a time when the government and the developers are coming up with initiatives to make new properties cheaper, buying a home is evidently the smarter choice.

The change in mentality, along with the increased affordability of homes and the various initiatives by the government are driving investments in the sector. It appears that this trend would continue in the coming years as well.

While the COVID-19 pandemic has affected almost every sector, the real estate sector is one of the worst-hit among them. Property sales have witnessed a decline all over the globe. The Indian real estate sector entered tough times with investors being sceptical about buying properties. However, the situation is now expected to improve, with several factors driving investments in the sector.

The pandemic caused stock markets to crash, thus leading to the investors suffering huge losses. The stocks are currently quite volatile and not very reliable for investment purposes. At such a time, investors are finding real estate properties to be safe investment assets. Real estate properties being tangible, they reassure the investors with the sense of owning something real. Moreover, they can generate rental income steadily as housing is constantly in demand.

In order to combat climate change, the Government of India has been emphasising on sustainable projects. Even during the pandemic, the government has continued to urge developers to come up with green living facilities and other eco-friendly features. Sustainable projects receive various types of assistance from the government, thus helping the builders complete and deliver the projects faster. This, in turn, builds up the confidence among homebuyers as they have to worry less about problems like delayed possession.

One of the most important factors driving real estate investments this year is that properties have become more affordable. In order to boost sales, many of the developers lowered the prices or came up with offers like cashback policies, free benefits, etc. The government and RBI have also worked on making housing more affordable. They have taken several steps, the most notable among them being the slashing of home loan interest rates and stamp duty charges. Evidently, the investors are seeing this as a great opportunity as they can get the same lucrative returns by investing less.

The demand for housing has also shot up among end-users during the pandemic. For a few years in recent times, the traditional mindset of owning a home being a priority was replaced by one focused on renting. Millennials considered rental accommodation to be cheaper than buying a home. However, with rising land rates, renting homes has become expensive in the long run. At a time when the government and the developers are coming up with initiatives to make new properties cheaper, buying a home is evidently the smarter choice.

The change in mentality, along with the increased affordability of homes and the various initiatives by the government are driving investments in the sector. It appears that this trend would continue in the coming years as well.