"Adapting to Change: The Transformation of Real Estate Post-COVID"

2020 was the year of transformation of real estate post covid when no one had an idea that this pandemic would transform their life. The situation was uncertain, there was no clue about this pandemic and how people should react. The real estate market was down by 25%. The government reduced stamp duty by 4%. You can call this market crash or an opportunity but trust me 2020 was the best year for all real estate investors till now. Let me explain.

How COVID has created opportunities for real estate investors?

In recent years property price growth has been exponentially high. Especially in Maharashtra. The market crash and reduction in stamp duty was the golden chance for any investor.

For example: You bought the property in 2020 for 1 crore in 80 lacs, a 20% bargain margin. Plus now you’ll pay 3% stamp duty instead of standard 7%. The govt taxes you are paying at the rate of 3% on 80 lacs agreement value is Rs 2,40,000/-. Suppose you have paid the taxes at the rate of 7% then the figure would have been Rs 5,60,000/-. That means you saved Rs 3,20,000/- on taxes and 20% on property price which makes the total saving of Rs 23,20,000/-.

Above that home loan rates were at an all-time low in the past 20 years as low as 6.7% by Union Bank of India. This opportunity was lucrative for any investor in the market.

Example: I took a loan of 72 lacs at a 6.7% home loan rate on 80 lacs property at a disbursement value of 90% for 20 years tenure, then my interest amount would be Rs 58,87,773/- and if I had taken the loan on 8.7% then this interest amount could be at Rs 80,15,436/-

The story doesn’t end here. Developers were offering subvention schemes on under-construction and ready-possession properties too. They offered to pay 20% now and pay 80% on possession. On ready possession, they offered 70% now and 30% after a year. Some of them offered rental assurance of 3 or 5 years. These all metrics have kept moving in the real estate market. The market bounced back post-COVID at 40%, after being suppressed for 2 years during the pandemic. The properties were sold at Rs 1.20 cr in 2020 and now that same property costs you roughly around Rs 1.60 cr in 2024.

Time is Money

I think we all have learned this in school but never applied it in real life. COVID has demonstrated to us that 60-70% of the working class can work from home and it saves a lot of time in metro cities. It improved work-life balance and work efficiency. Organizations have saved on their company resources like pantry items, electricity, workforce, etc. People have understood that traveling by local transport will make more sense than going in their car. You can do a lot of things in those 2 hours in traffic. Due to WFH people have shifted from 1 to 2 BHK, 2 to 3 BHK homes to dedicate one room to their workplace. It led to increased demand for rental homes, and the common man was ready to pay high rentals. The market soared after the pandemic. Spending power improved among all classes of people because the pandemic has forced to creation of new opportunities for doing business.

Almost all businesses have gone online now. Payments have become completely digital. Including your real estate, where people think real estate cannot operate without physical meetings, I agree with that point but on to a certain extent.

When the digital age entered in real estate market, technologies like AI (Artificial intelligence), AR (Augmented reality), VR (Virtual Reality), 5G, and blockchain technology sped up the process of information and changed the whole customer experience. Common man can do site visits at home through virtual headsets or they can see the sample flat through 360 degree view. Augmented reality has taken site visits to another level. In this, you can visualise yourself being in that project or your dream home to make you feel the real experience. You can buy a property through blockchain technology in small fragments, It makes it easy, affordable, and safe to buy property from any corner of the world just like that. So now real estate is not just limited to pen and paper.

Infra Development is at a fast pace

Demand for Commercial properties

Recreational zones

Upcoming developments in the city