With the COVID vaccine expected anytime now, offices are reopening and millennials are returning to their workplaces. The impact of the rollout of the vaccine on real estate could drive an uptick in rental demand.
After dealing with a series of setbacks since the beginning of 2020, it seems the year is finally redeeming itself now. As the year comes to an end, the world is eagerly waiting for the vaccine. India may approve a coronavirus vaccine in a few weeks (of course in a phased manner). The real estate sector and a lot of industries have their eyes on the rollout of the vaccine. Well! How will it add to the confidence of homebuyers– still remains to be seen. What would be the impact of the rollout of vaccine on real estate? Let’s find out.
Square Yards chalks out the possibilities taking into consideration the different segments of the industry.
Impact of Vaccine on Real Estate Rental Markets
A lot of people have been working from their hometowns after the COVID-induced lockdown. With the rollout of vaccines, offices have started calling their employees to resume working from their workspaces. Hence, the real estate rental markets could pick up pace as people would return to their work locations in metro cities which will tread a new path for the real estate revival.
Demand for Office Spaces in the New Normal
Delighted with the rollout of vaccines, organisations are preparing themselves to welcome employees at the office. Employers are now looking for multiple office spaces in different micro-markets to complement the demographics of their employees. Corporates are planning space consumption judiciously keeping in view the minimum capital investment, rental costs, lower commute time, and social distancing.
Innovative Co-working Spaces
A lot of organisations are exploring the Work Near Home policy and leasing smaller co-working spaces in different locations. There are approximately 1,000 operational co-working centers with more than 400,000 seats across Mumbai, Delhi, NCR, Bengaluru, Chennai, and Hyderabad. Though the vaccines are here, still, Co-working spaces have geared themselves up with all safety protocols in check. Technology measures like automatic doors, smart lighting, sensor taps, hands-free check-ins are being adopted at co-working spaces.
Impact on Home Loan Rates and Stamp Duty
The year 2020 witnessed the mortgage interest rates hitting the 12th all-time low in the month of November. Home loan rates had been lowest in the year 2020 and the pattern is here to stay for some more time. Maharashtra introduced relaxations in stamp Duty and later NAREDCO declared zero stamp duty till the month of December 2020. With RBI infusing liquidity in the sector and the government’s policies, the stamp duty relaxations will purportedly continue.
So, the homebuyers have the advantage of low home loan rates, stamp duty relaxations, option of payment plans from the developers. Amidst the bouquet of offerings and the rollout of the coronavirus vaccine, it will be interesting to observe the changing wave of home buying sentiments across the country. While a segment of buyers with their stalled homebuying plans have their eyes on the rollout of the vaccine, on the other hand, there are some who want to hold on to their horses in anticipation of better deals and offers by developers. Experts believe real estate will regain pace but it could take 12-18 months. So, a revival of the real estate industry is definitely on the cards.
