Since the lockdown, people feel they need to own a more spacious home or villa, often for financial security, even if it is away from the city.

A white coloured luxury villaImage Credit:
news Real Estate Thursday, August 27, 2020 - 20:07

The pandemic has made Naveen Kudupudi, a software professional in Hyderabad, question the point of living in a city with a high cost of living, when there is an effective output working from home itself.

“In cities, the cost of living is high, and quality of life is low. I would prefer housing options at reasonable prices far away from the city. An independent house or a villa with a garden that has good internet connectivity and is spacious to accommodate everyone working or studying from home is my goal as this will provide me quality life,” he says.

Like Naveen, there are several people who are now looking at spacious homes, even if it is away from the city. As a result of this, while the demand for commercial spaces has drastically gone down during the pandemic, realtors say that the story is different when it comes to the residential segment.

In real estate, realtors broadly classify houses based on the budget as affordable homes, mid-level homes and luxury homes. Realtors say that homes that cost above Rs 2 crore usually qualify as the luxury segment and according to realtors, this segment has done exceptionally well during the pandemic. Despite several businesses being affected, the rich are now looking for bigger and more spacious homes.

Demand for luxury homes

According to Sumanth Reddy, president of the National Realtors Association of India, and the president of the Hyderabad Realtors Association, there has been a 50% increase in demand in the luxury segment.

“Due to this we are also witnessing a 10% increase in prices. Independent villas and 4BHK houses are seeing an increase in demand. During the lockdown people realised the importance of having an independent house or a villa.”

And while realtors saw absolutely no business in the months of April and May, Karuna Kumar Vakalapudi, CEO of Space Link Infra property consultants observed that with the lockdown being lifted, there has been a growth in the sales of residential projects.

While speaking to TNM, Kumar was returning after the registration of a couple of properties located in the Western part of Hyderabad. He said, “All the properties that we got registered today are above 1600 sft and go on until around 6000 sft. All these are transactions that have taken place in the last two months. Yes, people are scared to step out due to COVID-19, but those who really want to buy a home are going ahead.”

Vijay Reddy, Managing Director, Pranava Projects is also of the same opinion and says that the number of enquiries has increased multifold, but the pandemic is still having an impact on how many people end up purchasing a property.

“COVID-19 has taught people that it is important to own a home. The number of site visits by probable clients may have decreased, as people are still scared to come out, but the number of enquiries by clients have gone up. As people are not visiting sites, transactions have gone down by around 30%,” he adds.

Homes as financial security

Apart from wanting to own a home and live in spacious houses, people in Hyderabad are looking at properties right now as an additional source of income and are hoping that a subdued demand due to the pandemic will get them good deals.

I Srinivas Murthy, who is working as an associate vice-president in an MNC in Hyderabad says that the pandemic taught him the importance of having an alternate source of income. “With EMIs to pay, my son’s school fees and other liabilities, it is important to have an alternate source of income. Job losses and salary cuts have made me think about the importance of an investment. I am presently staying in my own house, but now I feel it is important to invest in another house for financial security,” says Murthy, who is currently hoping to get a good deal amid the pandemic.

G Navyasree, an HR recruiter working in an IT company also feels it is the right time to invest now, especially after she saw that a friend was able to purchase a newly-constructed house at a massive discount.  

“A friend of mine got a 3 BHK house in Shaikpet last month. A newly constructed house which was being quoted at Rs 75 lakh was sold for Rs 48 lakh as the builder was desperately looking for buyers. This made me also feel this is the right time to invest in a plot or a house,” she says.

Ajay Joseph, a sales analyst in an IT company in Hyderabad who has been desperately looking for a house, has visited around 25 properties in Kondapur, Puppalguda, Bachupally areas in Hyderabad. He also says that builders are ready to negotiate their prices.

However, Vijay Reddy says that while he also has observed that customers are hoping that prices will fall due to the present scenario, in reality, there is no drop in the market rate as builders have had to spend more in terms of labour, resources etc.

‘New projects stalled, ready projects in demand’

While a lot of people are willing to buy a house, the new projects that were slated to begin construction have been stalled majorly due to labour issues, despite having permissions in place. There is an uncertainty in the minds of the people about the delivery, due to which the demand for ready projects and those in final stages are seeing demand, as against new projects.

Ajay says that most projects he has seen are plagued with delays due to labour shortage “Clearly, there is a risk and a lot of uncertainty about the delivery of these projects. I have hardly come across a ready to move-in project.”

Sumanth Reddy confirms the trend saying that all those projects that are already ready or will be ready to move-in, in the next couple of months, are doing extremely well.

“This is because, during the pandemic when people started working from home, they realized the space at home is not enough. This has stoked an increase in sales especially in the luxury segment.”

READ: In Hyderabad, 'To-let' boards outside houses now a common sight

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