The COVID-19 pandemic has put a halt to all the business operations including real estate and devastated the global economy. However, with the exceptions from the lockdown given by the state government, all the real estate operations were resumed and expected to bounce back within a year. Now, many have a question, “will house prices fall after a lockdown in Hyderabad?”.
The answer is Yes.
Though the real estate is considered as a good investment, there was a rise in the unsold inventory of 3 bedroom flats for sale in Hyderabad because of the state lockdown.
In the previous article, we have already discussed the Adverse effects due to COVID-19 Pandemic on the housing market, builders, home buyers, mall developers, and office spaces, etc.
Because of this global crisis, the real estate supply chain has stopped its operations and the demand for flats for sale was decreased. As many companies have adopted WFH (Work From Home) system, realtors saw losses on office spaces investment. And a drastic fall in purchasing decisions and postponing the decisions ultimately leads to a drop in sales.
However, it does not apply to all locations. Some areas where there is a high demand but low supply will have a rise in the price of properties and sales.
As the cases of COVID-19 are unpredictable, remote work is picking up the speed and it impacts on construction work. Anyway, it’s a challenging scenario for realtors.
As per a survey, 40% of home prospects have postponed their decisions purchase of homes during the lockdown while 60% of prospects are seeking to buy flats within the next 12 months.
With the festive season is arriving in October, there will be a huge demand for an apartment for sales in Hyderabad. Realtors can make the best use of this opportunity to increase as many sales as possible.
Recently, many dilapidated buildings were identified in the jurisdiction of ACP Uma Prakash in and around Hyderabad and the GHMC has ordered civic authorities to demolish them and start new constructions over there. And for the buildings which need renovation, repair works are going on by the owners. These may be completed within this year-end.
As per the chairman of mortgage lender HDFC, Deepak Parekh, there would be a fall of real estate prices up to 20% because of the global crisis. He revealed this in a webinar organized by National Real estate development Council in March.
As the central government has announced resuming construction works and other real estate operations, developers have already started construction with the workforce.
On the flip side, the cost for raw materials (28% GST on cement) and a limited workforce gives a loss to developers. However, with the recent announcements by the state government on inventory gave a relief to the developers and realtors.
The status of new apartments for sale in Hyderabad:
The COVID-19 pandemic is a short-term hit. There is a huge demand for ready-to-move-in residential units despite the state lockdown.
K T Rama Rao, Minister of IT, Telangana has already set a target of 50,000 2BHK units to contractors to be completed on or before Dussehra that comes in October. Out of which 15000 units were completed and the remaining units in and around Hyderabad are in various stages of completion.
Moreover, the laborers who went for their home towns are back to Hyderabad. And the construction works are going with fast-pace to meet the target set by the Minister and own a structure stability certificate. And the state government has allocated Rs. 12,000 crore for 2020-21 budget to the housing department.
Though there is a spike in infections, the government has planned to take new more initiatives to lessen apartments for sale cost after COVID. As of now,
- Project deadlines are extended
- Interest rates on Home loans are decreased (8%)
- Inventory levels are increased
- Tax exemptions were made
- The repo rate was decreased to 4% by RBI
- Credit Linked Subsidy Scheme (CLSS) was extended until March 2021.
Many buying prospects have a question will house prices fall after a lockdown in Hyderabad?.
In a nutshell, there is an annual decline of 30% fall in prices in and around Hyderabad. It is good news for the home prospects as they can avail homes at low cost and there is no lack of residential flats launches by the developers.
Though there is a fall in the prices on homes, realtors need not struggle to rebound as the government has taken steps to revive the real estate.
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