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Since diversification is the key to an investment portfolio that reduces risk, real estate will act as a safe haven to secure accumulated wealth in the current scenario.
Today it is important for buyers to understand how to reduce the perception of risk when investing in real estate. Since diversification is key to reducing the risk of investment portfolios, real estate in the current scenario will act as a safe haven to secure accumulated wealth.
Before making an investment decision, let alone real estate, it is more important than ever to do thorough research, consult trusted advisors, and then make an informed investment decision. a long-term asset. Therefore, research is not enough, especially when it comes to real estate investments.
With construction stalled across the country in real estate and uncertainties surrounding project completion due to supply chain disruptions and availability of labor, buyers are unsure how to reduce the risk of your investment decision with implementation and liquidity problems. This has not only led to a significant change in consumer behavior and the value system, but also to greater caution and the search for greater self-confidence and control.
The government has provided support to developers with a six-month extension of project completion dates under RERA in order to relieve the sector. However, does it help consumers decide where and if it is a good time?
While uncertainty is anticipated for the next two quarters, this has created a sense of urgency and commitment even for serious home buyers looking to invest in real estate to secure their future. Also, benefits like discounts and programs, as well as more difficult business opportunities, can be used in today’s environment.
While the previous market was full of speculators, today’s customer, who has the intention and the money, also has a clear idea of where to invest. While in the past real estate investments were made in residential, commercial, and retail properties for short-term benefits such as rental profitability, today consumers are turning primarily to residential properties for their end uses. Because of this, the risk associated with investing in residential real estate, which requires end-user rather than rental income, compared to investing in other assets, and the ROI is minimal.
The greatest impact of the pandemic and the subsequent blockade has been the typology. Two main trends have emerged: the growing demand for condos, a relatively new concept to Indian buyers, and then the demand for ready-to-move or near-completion units that are low risk; readily available to own with easy financing options.
Move-in-ready condos also show increased traction due to expected delays in deliveries of units under construction. With no goods and services taxes (GST) to be paid for resale homes, the demand for move-in-ready homes has grown significantly since the foreclosure, and the industry is also moving in the direction of that trend.
An investor interested in residential real estate for the first time decides to move and not just invest in the accumulated fund. The decision is also determined by the state of mind: to protect your own future, that of your elderly parents, and that of the next generation. As a result, prospective buyers who had been in talks for more than 3-6 months have decided to close deals during foreclosure.
The demand is reflected in all segments, from affordable housing to high-end and luxury, depending on the need and the value of the investment. Another trend that will emerge from this period is the demand for condominiums and integrated townships in Level II cities, which are becoming a preferred destination beyond the metro. With affordable prices, more space, and a better return on investment, Tier-II cities benefit from increased investment from buyers looking to minimize risk and maximize profitability. In a post-COVID era, some shoppers are also seeking a lifestyle away from the hustle and bustle of traditional city life.
In conclusion, before making any investment and choosing a property, it is important that you align your investments with your appetite for risk and your financial objectives and balance them with the potential returns. It is worth investing in incredible developers who have proven to meet their commitments and RERA approved properties to minimize risk. Also, your investment decision will be based on your own needs and not on a general trend, as real estate offers some diversification compared to other asset classes and its long-term outlook remains attractive. Evaluate your financial situation not only today but also for five to ten years. Finally, if you want to get a loan, you must continue to control interest rates in favor of the low-interest rate system.
