The current pandemic Covid-19 has affected many industries and has left many investors with numerous unanswered questions, one of these being whether it’s a good idea to invest during the pandemic or not. Most investors are not sure of what to do. And maybe you are here because you too are in the same state of confusion.
The pandemic has proven that it is better to own a home than to lend because renting comes with many uncertainties. Also, when renting, there is often not enough space for outdoor activities. With the current situation, people are expected to observe social distances, those who own homes have had their lives go on normally because they have a garden and space they can relax and play.
Also, since the stock market is very volatile, it’s now dawning on most people that they should have real estate investments. Every coin has two sides, so here you will learn the advantages and disadvantages of investing in properties during the Covid-19 pandemic.
It is uncertain how the current pandemic can be controlled and the volatility of the stock market that comes with it, and because of that, it may become normal to invest in properties. Besides, properties give the investor low risks and a fantastic diversification scope than the stocks market. And owners of real estate get undisrupted flow is income even in times of crisis.
But besides all the benefits, it can be a challenging decision to invest in properties during the current pandemic, particularly as a result of the current liquidity crunch and the fact that no one knows how the job market will be after Covid-19. For investors thinking on whether to buy a property or not during this time, these points will help you. And if you opt to venture in the real estate industry even during the pandemic, Movoto.com will be of great help.
Advantages of Purchasing Property During Covid-19
- Mortgage Rates are Low
When mortgage rates are low, it means loans become affordable. At present, these rates stand at 4%, meaning you can quickly become a homeowner, one of the biggest dreams of all Americans. In 2020 May, the Reserve Bank of India reduced the repo rate by forty bases meaning 4.4% to 4%. Furthermore, the reserve repo rate came down to 3.35%.
- There are Great Schemes in the Market
Real Estate developers are trying to shed off their properties and drive sales and attract buyers by giving discounts, subvention schemes, and affordable payment plans. Most investors are also providing a refundable booking, cashback offers, and free cancellation to those willing to buy now. So this time could be the best to negotiate with your agent.
- Possibility of Price Increase after Covid-19
The construction section has slowed down because of the different regulations given to prevent the spread of the disease. Because of that, it’s possible to assume there will not be many new homes for sale in the market, and it may take several months before the market goes back to normal. Consequently, the demand will be more than the supply pushing property prices up. Hence if you buy a home now, you may reap big soon.
With these points, you may think buying property is the best thing to do. But you should look at two sides of the scenario to make an informed decision.
Challenges of Purchasing Property During Covid-19
- Project Delays
Since most construction activities have been halted, you may not get your property when you want it. Also, most migrant workers are relocating, and when you add the current liquidity crisis to it, the properties market faces even tougher challenges. So if you opt to purchase a property during this pandemic, you should think of buying from a reputable developer.
- Uncertain Economic Situation
You have seen huge economies struggle to sustain businesses. Furthermore, economies depending on foreign economies are likely to suffer hugely. With the increasing rate of unemployment, kick-starting activities that expand the economy will take more than liquidity infusion.
- Possibility of a Reduction in Property Prices
According to most experts, the prices of properties will increase; the opposite could also be true. It is even too early to tell whether prices will go up or down. Therefore putting your money in a property that is not yet complete can stretch your budget the more. Some people buy property to build wealth in the long run while others do so for end-usage. Irrespective of the reason, the buyer should take into consideration several things.
While it’s possible to purchase property during the current Covid-19 pandemic, it is vital to weigh both the advantages and don’t disadvantage of doing so. With this you will make a decision that you won’t regret you did it.