Covid, Social Distancing, Quarantine, Work From Home – A few years ago, these terms would not have meant a lot, but in today’s post-covid world, they mean everything.
The pandemic that changed our lives forever has had an unbelievable impact on how we shop, work and live. And this big change has led to an even bigger change that is shaking up the real estate market.
During the First wave, the realty market began to witness a surge in demand for plots and independent villas. By the time we hit the second wave, this surge has grown to a tide that has seen most under construction villa projects, and premium plot projects sell out in a few months. This, while the sale and demand for apartments has been steadily declining. Leaving many apartment builders in deep trouble.
So what is causing this change from a strong Apartment buying market to a bullish plot and villa market? The answer is quite simple. Thanks to the pandemic, many people who have bought an apartment or have been living in one, got to see the negative side of large community living.
Apartment dwellers faced unbelievable hardships and limitations due to the lockdowns, while their friends and family members living in independent houses continued to enjoy a great amount of freedom and privacy although they also had to adhere to lockdown rules.
Apartment dwellers faced repeated quarantines every time someone in the community got infected. Delivery of parcels, food and even groceries were not permitted in many communities that had to enforce rules to prevent the spread of infection. Residents were forced to stay indoors even though they were not infected. They could not bring family or relatives home and could not step out to visit them even when the lockdown was lifted, because the community enforced those rules. There were many sad accounts of apartment residents being treated like untouchables because one of them or their family members caught the infection. The amenities that big apartment complexes offered were unused because of social distancing rules, although residents still had to pay huge maintenance fees to keep them running. And finally many helpless rental tenants were forced to move out of their home because the apartment owners felt they wanted to reclaim the apartment.
All of this made many home buyers see the unmatched benefits of living in their own, independent home. Where they could have total privacy and freedom of movement without being constrained by the congestion and rules of a large apartment community.
From an investment perspective too, apartment owners saw big fluctuations in earning rental returns, since many tenants left their apartments and headed to their home towns, to continue working from home. This, combined with the large unsold inventory of apartments and excessive delay in constructing ongoing projects also resulted in a sharp drop in apartment prices.
Villa and Plot owners on the other hand saw the exact opposite. Across many cities Villa and Plot demand increased by as much as 7%. Along with this the value of land also saw a sharp increase.
With the news of a Third and possible Fourth wave of infection always on the horizon, this trend is bound to last for a long time. This shift has also made apartment buyers and residents realise that the huge amount they spend on monthly maintenance charge is wasted as they could not and, in the future, will choose not to use the hundreds of amenities being offered by the builders.
If you do not own a plot or an independent home, now is the best time to take the plunge and invest in one before the prices reach for the sky or we head into a new lockdown.