Impact of COVID-19 on Housing Prices: Understanding the Current Scenario
As an SEO expert at Google, I have been closely monitoring the impact of the pandemic on various sectors, including the real estate industry. This article delves into the question of whether the housing prices are expected to change due to the ongoing pandemic.
Historical Context and Market Trends
I have been in the real estate sales industry since 1978, witnessing numerous market booms and busts. From my extensive experience, I do not expect housing prices to drop significantly. The sector is primarily driven by the balance between demand and supply. In most cases, when there are more buyers than available properties, prices tend to remain stable or even rise, unless there is a significant economic downturn.
Recent Market Data and Trends
Let's look at the recent data to understand the current real estate market trends in India:
Quarterly Sales Data
The Indian real estate market experienced a significant spike in sales towards the end of 2020. Sales increased by approximately 78% compared to the same period in the previous year. According to top real estate agencies, the fourth quarter of 2020 saw sales of around 110,000 units, a substantial increase from the 62,500 units sold in Q3 2020.
New Launches
Despite the global pandemic, the sector witnessed a significant growth in new real estate launches. Closing reports indicate a 56% increase in nationwide new real estate launches in 2020 compared to the same period in 2019. The sector saw approximately 63,000 units launched, compared to approximately 41,000 units in the same period the previous year.
Mumbai Metropolitan Region (MMR)
The MMR has shown impressive growth, with a 175% increase in new launches. The number of units launched increased from a low of approximately 9,400 to around 26,000 units. Furthermore, sales absorption in the MMR region also saw a significant increase, with sales rising from around 21,100 units to approximately 49,000 units.
Impact on Different Types of Properties
The impact of the pandemic varies for different types of properties. For well-located residential properties, the prices are less likely to change due to the ongoing pandemic. These properties are in great demand, and sellers are not willing to sell below market prices. Therefore, the chances of price reduction for such properties are very low.
On the other hand, under-construction properties may see a price correction of around 5 to 15%. This is because these properties are subject to market fluctuations and the current economic environment.
Investment Opportunities
Given the current market conditions, this is an opportune time for buyers to invest or purchase properties. With the lowest interest rates from banks and the potential for good negotiation with sellers, it is a great time to make a purchase. Grasping this opportunity can be highly beneficial.