Despite budget alignments, job security holds a key to reviving the real estate sector

Although the second quarter of 2020, i.e. from April to June, saw a significant slump in the real-estate sector, things have been looking up since July. In order to revive the real-estate sector, the Reserve Bank of India (RBI) along with property developers, has made significant adjustments in order to lure customers. 

However, one of the main aspects that seem to be holding back the progress is the aspect of job security, or rather the lack thereof. As much as there is a rise in housing demand, the economy would see a further uptick, when prospective home-buyers have assured the security of their jobs. 

With the RBI lowering interest rates on home loans, and with developers reducing housing prices, the final obstacle in seeing a full-blown revival of the real-estate sector seems to be significantly dependent on job security. 

Buying homes and properties involve much thought and emotion, thus financial security and confidence in the future play a major role in the final decision. A survey published by Jones Lang LeSalle (JLL, India) reported that “Sales of residential units are expected to witness an uptick once the revival of the economy starts and prospective buyers feel secure in their jobs.” This survey was conducted across 6 major cities, namely Bengaluru, Delhi-NCR, Mumbai, Chennai, and Hyderabad, during June and July with 2,500 participants. 

With lockdowns now being lifted and things slowly returning to “business as usual,” homebuyers are beginning to return to the market. Several are taking advantage of the concessions that have been made by the government and property developers, due to unsold inventory at various stages of construction. Vast numbers of housing units and developed properties have burdened the economy and developers are looking to liquidate the same, by offering substantial reductions on prices. One thing is for sure, this situation leaves the real-estate sector with little scope for increasing prices. 

However, market leaders such as JLL (India) feel that price cuts, low-interest rates, and attractive payment plans, although needed, may not be sufficient to restore sales in the real-estate market sector over the next few months. 

The aforementioned survey also found that 91% of the respondents showed a greater likeliness to buying a house, rather than renting it. A further 67% of respondents indicated that buying a home is no more a luxury, but an imperative. 

With all that has been said, if one can overcome the fear of job security, investing in real estate at this time would be a great advantage, since over the next few months, when things normalize, the RBI may revert to higher rates of interests and property developers may call off their liquidating plans. 

Keep coming back to Owner and Tenant for the latest updates in regards to the real-estate sector and also for any requirement that you may have, be it buying, selling, renting, or maintaining your valuable properties.