COVID-19 influencing investment options: Real Estate considered the best Asset class.
It has been a common fact that amongst all the various investment opportunities available, real estate investment has proven to be the most beneficial and least volatile, keeping in mind the current COVID pandemic. In addition to that, with the home loan interests being at an all-time low (7.15% to 7.8%) this is considered to be perhaps the perfect time to invest in a property for our own homes. If one thing the pandemic has taught us, it’s the value of owning our own homes, instead of living on rent. Based on these major factors in favor of property investments, Sunil Agrawal & Associates, a leading real estate company in the city of Indore, decided to hold up a survey that would detail the sentiments of the prospective homebuyers and analyze their thoughts on property investments during the Lockdown.
The survey was held from 4th May to 8th May 2020 in the city of Indore, amongst 512 respondents who all ranged between 22 to 65 years. As per the findings, the majority of the participants believe that Real estate is the best asset class for investment and consider ‘now’ as the right time to buy a property. The major reason for home-buyers to invest in property still remained attractive deals offered by builders and developers (42%), followed by those who felt the deciding factor to be the sense of security that physical assets provide (21%). Whereas a fraction of them considered, Return on Investments (19%) and availability of cheaper home loans (15%) as the deciding factors. Homebuyers still consider Plots (33%) and Row-houses (46%) to be the ideal property type for investing when compared to flats (21%). The percentage of responses for the best asset class for investment amidst COVID-19 ranged from 62% of respondents who believed that residential real estate investments were the best bet due to low volatility and risk involved. Other ideal choices were fixed deposits for 19%, gold for 10%, and stocks for the remaining 9% of respondents. A major number of respondents (51%) agreed that this was the best time to invest in real estate, majorly because in light of recent events it was felt that a profitable deal could be achieved from builders, in addition to gaining a sense of security that physical assets provide. A fraction of them (11%) had already taken the step of investing in real estate during this period. It was noted that amongst those who had previously booked their property, the majority of the buyers (61%) were set on continuing with their bookings and were quite happy with their purchase. Although a small fraction of them (9%) decided to cancel their bookings, still there was a considerable number of respondents (30%) who were unsure of what step they would take.
It was noted that despite the uncertainties and monetary loss that surrounded the pandemic, half of the respondents (52%) confirmed that they would continue with their plan for investments. In fact, there was a fraction (22%) that previously had no plans of buying property but given the current market conditions have made up their mind to do so. Another interesting finding that the survey highlighted was that, where 60% considered buying property for their personal use (end users), 40% believed it to be ludicrous investment, which interestingly was not the case before the COVID-19 pandemic. The most popular requirement by the majority of the respondents was ready to move in properties (43%), perhaps considering the risks that the pandemic has posed. The second most popular option was of the ‘new launches’ (21%) supported by investors (71%) and other buyers who were looking for properties with a 20 to 40 lakh budget (36%) and even less than 20 lakhs (27%). The budget that the respondents preferred had a wide range from those who preferred the property to be between 20 to 40 lakh (35%). Other ideal price ranges were less than 20 lakh (25%) and between 40 to 60 lakh (26%). Equal percentages of respondents (7%) were ready to invest 60 lakh to one crore and more than one crore on property.
Overall, the survey concluded with the major observations like owning a house is the top priority for Generation Y. Attractive deals offered by builders and developers and the sense of security the physical assets provide are the key factors determining change. In addition to that, affordable and mid-segment properties continue to remain the top choice of the maximum home seekers. And finally, the demand for ‘Ready to Move’ in property is still the highest.
