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The 5 Most Common Rental Property Repairs

A rental property has a lifespan. It won't serve as a viable asset for long. There would certainly be wear-and-tear issues and appliances at your home have to be checked periodically. Being a landlord, it is your duty to keep a check on all these aspects. If any problem arises or if your tenant reports to you of any issue in your property, you need to attend to it immediately.

Here we will discuss the most common rental property repairs landlords have to deal with.

Read our Article: LEARN THE RIGHT WAY OF PROPERTY LISTING

The Benefits of Property Repairs:

You need to ensure that your property is very well maintained. Maintenance is one of the most crucial aspects of a property. A well-maintained property is always high in demand and can help you yield good rental income. For example, regular maintenance of your windows, roofing, appliances is very important. With regular maintenance, you can make sure to prevent potential issues on your property. Regular maintenance of your property can help you unearth issues at the very start which will help you save repair costs, labour costs, etc.

Here are some of the most common property repairs that every landlord must be aware of:

Plumbing

It is always good to have a good rapport with your tenants.  This will help you to be kept updated by your tenant about any issues in your property. If there are any issues of water leakage, you can attend to them without wasting any time. Plumbing repair is not a task and can be managed by yourself if you have the right tools at hand. And if repairing by yourself, you can undoubtedly save a few rupees. But if you don't know how to do it correctly, it could cost you a lot of money.

Clogged toilets

It is necessary for the landlord and the tenant to predetermine each of their responsibilities before the keys are handed over and the tenant moves in. Normally clogging in the toilets are to be fixed by the tenant. But also it is to be noted that not all clogging in the toilets is the fault of the tenants. Sometimes, clogging could occur due to problems in the plumbing line and draining it could help to fix it. It could also happen due to some obstruction in the line or something underground that is blocking it.

Appliances

One of the benefits of rental property is that the tenant can use the appliances provided by the landlord.  But if there are any issues or damages to the appliances, it has to be fixed by the tenant. But issues like damaged air conditioners, broken television sets or furniture have to be fixed by the tenant. Sometimes in rare scenarios, if the tenant is not able to fix it by himself, he needs to report it to the landlord and they can have a mutual understanding about how to tackle the issue.

Rodents

Rodents are a big issue. Even if your house is very well maintained, rodents like mice, rats, and gophers would be there. Rodents can cause severe problems if it is not dealt with at the right time. It can eat away wires, destroy your furniture, edible items, foods, mattresses, etc. Hence, it is very important for a landlord to help tenants fix such problems at the earliest.

Taking the decision of rental property investment is a crucial task. And if you own a rental property, there are issues that are going to arise from time to time. One thing you can do is to set aside some reserve funds so that you can quickly attend to any problems that arise. Addressing issues and repairs of your property can help you reduce operating costs and can help you save money to a great extent. Hence, it is a good practice to ask your tenant to keep you informed about any obstacles or issues with regard to your property so that it can be attended to without causing a delay.

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Who Pays Closing Costs When A Property Sells?

Have you ever wanted to know who pays closing costs on a real estate deal? Herein, we will discuss in detail the closing costs one can expect to pay on a deal and who is responsible to pay the closing costs.

Closing costs are something that most buyers do not prefer to talk about as they are already spending a lot of money on the house. Closing cost is an additional payment made in order to enable one to make a subsequently larger payment. However, it is to be noted that closing cost is evitable and one has to bear the expense at one point or later.

Now let us try to understand who pays the closing cost.

Who pays closing costs on a house?

As a matter of fact, certain costs are to be paid both by the buyers and sellers at the closing table. Closing costs, which especially consist of the 'line-item expenses, are solely reserved for the buyers. Though sellers too have to bear some expenses at the closing table, that generally cannot be counted as closing costs. The real estate commission or the broker's fee has to be paid by the seller at the time of closing. And the rest of the charges and expenses are the buyer's responsibility. Unless the terms of the deal dictate otherwise, it is the responsibility of the buyers to pay the closing costs.

Who is responsible to pay the closing costs?

Usually, it is the responsibility of the buyer to pay the closing cost at the end of a real estate deal.  Either party could pay the closing costs. But it is typically the buyer's responsibility to pay the closing costs. Closing costs can be negotiated and in order to expedite a sale, the seller can offer to pay the closing cost. The reasons could be many, for either party to take responsibility to pay the closing costs on an impending deal. It is expected that the buyers pay the closing costs on a deal but it is not necessary that other arrangements with regard to this can't be made.

Seller closing costs

As per the real estate norms, sellers don't need to pay the closing costs. Closing costs are synonymous with terms related to line-item expenses like appraisal fees, title insurance etc. Sellers are only expected to pay the fees of the real estate broker. Realtor fees are not counted as part of closing costs but have to be paid at the time of deal closure.

There are some additional seller costs that are to be noted. You may be required to pay a one-time load repayment fee which would depend on your mortgage company. Hence you need to ensure that you read all the terms and conditions of the mortgage before closing. For instance, any home improvement tasks such as light fixture repairs, paint touch-ups are required to be accounted for. Moving expenses can be overlooked but it is important to consider the costs of hiring a moving company when it is time to leave your property.

Average closing costs for sellers

Though this is not a closing cost technically, it is the responsibility of the seller to compensate the real estate agent who is representing each side of the deal. A real estate agent charges approximately 6% of the sale price of the home as commission.

Buyer closing costs

A lot of closing costs arise from the loan the buyers are acquiring to buy the property.

Below provided list is the average closing cost for the buyer:

Appraisal fee.

Origination fee.

Prepaid interest.

Prepaid insurance.

Title insurance.

Tax servicing fee.

Credit report fee.

Bank processing fee.

Recording fee.

Notary fee

Average closing costs for buyers

The closing cost would amount to 2% to 5% of the purchase price. You need to be sure and must be aware of where the money is going before you pay the closing costs. Also, make sure that you go through each line item with a mortgage professional in order to have a clear understanding of the situation.

It is important to know about the intricacies of closing costs and when and where you are required to pay them. Also, it is very important to know who should pay the closing costs of a property.

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The ultimate guide to homeowners association rules

Compared to a few years back, Homeowners Associations (HOAs) have become a common topic today.  It is important for homeowners and investors to be more aware of what they are buying into. The quality of life and financial situation can be impacted by the Homeowners Associations. It is very important to know the common HOA rules and what would be the impact for those living within that jurisdiction. An area can have significant value through amenities and some rules because of HOAs. HOAs exercise a lot of power over communities and neglecting to learn their rules and regulations is a disservice to yourself.

It is a good practice to familiarize yourself with the HOA rules before you buy your next investment property.

What are Homeowners Associations (HOAs)?

HOAs are the governing bodies that establish rules and regulations which are traditionally used to run a particular housing development.  The main reason Homeowners associations exist is because developers have a vested interest and inclination in the success of their respective home buyers. Marketing, managing, selling, and maintaining a particular residential jurisdiction's status quo is the reason why developers have formed private associations such as HOA. The homeowner's associations enable developers to keep tabs on their projects after homes are sold. The ownership of the HOA is transferred by the developers to the homeowners who have purchased into their community after a certain number of lots have been sold. At this point, the concerns of the community are transferred to the homeowners from the developers.

Planned Development HOAs

The homeowners abiding by the HOA rules and regulations and paying the HOA fees would be required by many planned developments. The allowed appearance of the community's homes and yards, the number of pets that are allowed per household, noise restrictions etc are some of the HOA guidelines. Members who live within the community would regulate the shared amenities and common areas which are part of HOAs. There are only a very few Americans that are likely to live in an HOA community.

HOA Rules and Regulations Examples

The Declaration of Covenants, Conditions, and Restrictions (CC&Rs) are a system of rules that govern the HOAs. Let us discuss some of the common regulations:

Fee Obligations

Providing the best living experience is the duty of the HOA and this comes at a cost. The dues have to be paid by the homeowners and it has to be ensured that the HOA has the required funds to maintain the building or neighbourhood. The neighbourhood is governed by the HOA because of the dues paid.

Pet Regulations

There is a reputation developed by the HOAs for implementing stringent pet regulations. Though pets are allowed by most HOAs, but only after including a specific set of pet regulations and rules which allows them to have good control over the community. Therefore, much to many homeowners' dismay, pet regulations are some of the most common HOA rules in the country.

Rental Guidelines

It is important for homeowners and investors to know that renters will be subject to the same CC&Rs as everyone else. Property owners are required to notify the HOA if they are choosing to rent out a home so that the HOA knows who is living in the property. More importantly, the HOA rules need to be communicated by the homeowners to the renters. As per homeowners rules and regulations, homeowners could be penalized if their tenant fails to follow the rules.

Maintenance Standards

The homeowners associated with the HOA are required to maintain their curb appeal. Routine maintenance like mowing and watering the lawn cannot be neglected. Because failing to do it might ruin the aesthetics and the perceived value of the living area could reduce because of such inconsistencies. And it is completely up to the homeowners to maintain the property and keep it immaculate and presentable, meeting the HOA's standards.

Occupancy Limits

As per the HOA rules, there are certain limitations as to how many people can inhibit in one dwelling and this restriction in order to reduce congestion. The limits are defined by the square footage of a home. If the home is bigger, the HOA may allow more people to live in it.

Parking

One of the most common HOA rules is the parking regulations. Regulating which vehicles are permitted, the speed regulations and the parking stipulations are some of the rules of HOA.

Noise

Homeowners are urged to exercise restraint by HOAwhen it comes to noisy activities. HOAs have quiet hours that restrict noise in the neighbourhood during the night or early morning.

Insurance

The insurance guidelines of homeowners will vary by state. As a benefit of belonging to the HOA, some insurance costs would be covered by the HOA whereas the other insurance costs are required to be covered by the homeowner and it is the homeowner's responsibility. It is a good practice to check the specific HOA's insurance rules in order to understand what insurance costs you are liable to pay and which is your responsibility and what other added insurance the HOA may provide.

The above mentioned are the most common rules of the HOA and there are several other regulations pertaining to building or area. Hence, the list above is a general overview of what are some of the basic and most important rules of the homeowners association.

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5 Commercial Real Estate Trends That Are Dominating In 2021

In the first quarter of 2021 a record high of investment in the Indian realty sector. A staggering 3% to 12% increase in demand for residential realty was witnessed in real estate market hubs like Mumbai, Hyderabad, etc. Whereas we also see a considerable increase in commercial properties such as office space, shops, space in business centres, etc. Though we have read and heard a lot about how the residential real estate sector got stabilized after the havoc stirred by the COVID-19 pandemic, demonetization, GST and RERA, not much has been discussed about the commercial real estate sector. It is extremely important to understand the real estate trends of the commercial sector as it plays a very crucial role in the country's economy.

In this context, let us discuss 5 important commercial real estate trends that are dominating in 2021.

The rise in demand for industrial real estate

In the past year, there was a considerable increase in the demand for industrial real estate in the commercial real estate sector. It is expected that the demand for industrial real estate is going to continue to grow in the coming years. Such increased demand is the result of the growing e-commerce marketplaces.  The majority of the commercial property investment is done for logistic services and in order to set up warehouses and logistics centres for their products. As a result, there will be a massive increase in the leasing value and rental value.

Commercial real estate tech evolution

In today's times, technology plays a very important role in the real estate sector. The commercial real estate sector is also dependent on technology. New technologies are being adopted by commercial builders and developers in order to make the process more environment-friendly. The tech evolution in the commercial sector is booming and is poised to grow in the coming years. There have been many technologies that have provided security solutions for various issues like fire, theft, etc but have also provided management solutions on the cloud. Technological investments are going to increase with the advancement of technologies like the internet of things, automated systems, blockchain, etc.

Office Spaces on Pre-Commitment

Commercial property developers and real estate investors would lease out those properties that are ready for possession or ready to move in. But today, we see that office spaces and commercial areas are leased out on a pre-commitment basis. Because of the growing demand of commercial players, people are pre-booking office spaces in under-construction buildings. It is not just the commercial properties, but also under-construction properties that are in high demand.

Physical Retail Stores Boom

As Amazon has launched its retail outlets like Amazon Books, Amazon Go, Amazon 4-Star, etc, e-commerce entities have realized the importance of physical retail shops. From just being a sole online vendor to launching their own brick and mortar stores, businesses have realized the prominence and importance of physical outlets / retail shops.

Millennials Migrate to Secondary and Tertiary Markets

Millennials are moving towards the outskirts of the cities to settle down in life as metropolitan cities are getting over-saturated with professionals. These areas are known as hipsturbia or urban burbs. As the millennials are moving towards the outskirts, the retailers are showing interest to invest in such locations in order to cater to the millennials. Also, millennials are expressing interest to invest in commercial property markets and risk-free markets like the secondary and tertiary markets.

These are some of the commercial real estate trends that are dominating the year 2021. Both retail investors and buyers need to be aware of the commercial property market and the real estate trends in India.

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ALL ABOUT THE MAHARASHTRA RENT CONTROL ACT

The leasing of homes are governed by the Rent Control Act, and each state has its own version of the act. The Maharashtra Rent Control Act, 1999, which is the new Act in Maharashtra has made many changes in the Bombay Rent Control Act and the changes are applicable to the entire state.

It was during the Bombay Presidency in 1915 that the first rent law in India was passed and later in 1939. Later on, the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 replaced this act. In a bid to regulate the rental housing market in the state, all the former acts were replaced by the Maharashtra Rent Control Act, 199 which was the final act. Both tenants and landlords are benefited from the Maharashtra Rent Act. The aim of this act is to provide affordable temporary accommodation to the residents of the state which ensures a transparent relationship between both parties. The Maharashtra Rent Control Bill, 1999, was passed by the Legislative Assembly and the Legislative Council, with some amendments that were aimed to unify the three different rent control laws in the state. The premises that rightfully belong to the Government or a local authority, the premises let or sublet to banks, any public sector undertakings or any Corporation established by the centre or the State Act is not applied to this act. maintaining the entire residential or commercial building, and seeking amendments thereof are the sole responsibility of a landlord.

Now let us try to understand the duties of the landlord and tenant under the Maharashtra Rent Control Act.

The Duties of the Landlord and Tenant Under the Maharashtra Rent Control Act:

The duties of both the landlord and the tenant are specified by the Maharashtra Rent Control Bill, 1999.

Rent Conditions -

The right to decide the rent and increase it at the rate of four per cent per annum from the date of the commencement of the Act is maintained by the landlord. If 70% of the tenants provide written consent, the landlord has the right to increase the rent at the rate of 15% per annum for any improvements and alterations. In the case of specific structural repair, which is exclusive of any repairs carried out under the Maharashtra Housing and Area Development Authority (MHADA) Act, the landlord can further increase the rent by 25% per annum. The rent can be increased by the landlord if the taxes increase during that period.

Eviction Conditions -

Section 16 (1) of the Act allows the landlord to recover possession that is subject to provisions under Section 25. As stated in Section 25, a landlord is entitled to recover possession of any premises if the court is satisfied that the premises are reasonable and authentic. If the tenant raises any permanent structure on the premises without the permission of the landlord, the landlord can recover the possession of the property. The landlord can recover possession of the tenant, his agent, servant, or people claiming under the tenant or anyone residing with the tenant is found guilty of conduct that is an annoyance or nuisance to the neighbouring houses. Also, if the tenant is accountable and has been convicted of using the premises or allowing the premises to be used for illegal or another unauthentic purpose, the landlord can recover possession of the house. Hence it is important that the tenant rules and regulations are followed strictly by the tenant and the tenants abide by the prerequisites defined by the landlord.

Read our article on "HOW TO SCREEN TENANTS FOR RENTAL PROPERTIES"

Rules for Rebuilding -

Various conditions for rebuilding purposes are to be met by the landlords. As mentioned in sub-section 6, certain undertakings are required to be carried out which are as follows:

Securing sufficient funds in order to carry out the work.

The concerned municipal authorities must prepare and approve the planning for the proposed building.

The number of residential units in the old building should be less than the number of residential units in the new building.

It should take not more than three months to complete the demolition work of the old building. And it should not take more than 15 months thereafter for the new building.

The carpet area of both the old building and the new building should be the same.

The premises in the new building will be offered to the tenants of the old building if an undertaking is given by the landlord stating that the carpet area of the premises allowed in the new building is the same as was in the old building.

Responsibility for the repair of the premises -

According to the act, it is mandatory for the landlord to keep the premises of the property in good condition. A notice of 15 days can be served by the tenant if the repairs are neglected by the landlord. As per the Maharashtra Rent Control Act, the tenant can make the repairs themselves and deduct the expenses of the repairs incurred by the tenant from the rent that they pay if the landlord refuses to comply with the notice. Not more than one-fourth of the recoverable amount should be exceeded of the rent payable by the tenant for that year.

These are some of the major points with regards to the Maharashtra Rent Control Act. And it is extremely important for the landlords and tenants to be aware of the rules and regulations of the Maharashtra Rent Control Act.

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Will the Indian real estate market witness a price crash due to Covid 19 impact?

This question is well so relevant in almost every sector and business. Covid 19 created a kind of crisis that had not been witnessed for decades, no one was prepared and certainly, there wasn’t any contingency plan for it. It came all of a sudden and disrupted the whole world. It was expected that the real estate sector would face a huge blow due to the ongoing pandemic situation which is still very much far from getting over. But today, standing here are due to deadly waves of coronavirus infection, what is the scenario today?                                                                           

Will the Indian real estate market crash down?

Let’s have a fact check of what coronavirus did to real estate so far.

It has been observed that in spite of the lockdown, the real estate market didn’t really see any price crash in 2020. The pricing of residential real estate almost stood up the crisis for all the major cities like Mumbai, Pune, Chennai, Kolkata, Bangalore and other tiers 1 cities. Though the pricing didn’t dip down to the unprofitable level, we have to admit that there were certain corrections in the prices that made the buying price go down slightly. However, it only increased the affordability for the buyers.

Again, it will be nice to notice that sales and demand in the real estate market showed a healthy recovery sign as soon as the lockdown was loosened. The more affordable pricing combined with the reduction in property loan interest rates by the government posed a good recovery path for the real estate market.

Also, it should be noted that the cost of raw materials, transportation of materials, labour issues, and many other factors makes it impossible for developers to further lower their price. Therefore it can be safely assumed that real estate pricing is unlikely to go further down from this point onwards. However, another question that many investors are concerned about is whether the real estate market price will go up in the future?

Some experts are seeing the possibility of a marginal rise in real estate prices in the near future, however, the market is more prone to hold the current stability for some more time now. Therefore, if an investor is looking forward to parking their money at a competitive price, this is perhaps the best time to invest in real estate.

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Dedicated digital investment platform to boost real estate growth in India

The central government has announced the launch of a dedicated digital investment platform to facilitate domestic investments and boost the growth of real estate in India. The upcoming platform is aimed to help in channelizing investments in real estate.

As per the Commerce Ministry, the upcoming digital platform is meant to do hand-holding, information dissemination and facilitation of domestic investors which will help and support the investors throughout their business cycle. The new platform is expected to include useful features like daily updates on policies and new schemes of the central and state governments. The platform will contain information about licenses, approvals, clearances and incentives. The real estate businesses are expected to get support from this new platform in terms of finding investment opportunities, funding, raw material availability, taxes and incentives. The dedicated digital investment promotion and facilitation team will further come in handy.

The new initiative has been announced just in time when the sector is recovering from the pandemic back-slash. The new platform is expected to help the homegrown financial backers. A recent study has shown that the rising new working class has a normal reserve fund of Rs 20 lakh for each annum. This new classification of the working class is different from the normal working class that has a profit of over merely Rs 2.5 lakh per annum. This new class with a bigger salary can be potential investors in the real estate sector. The report puts the number of such families at approximately 633000. More than 70% of these mogul families fall in the top 10 states with Maharashtra having the most noteworthy number of 56000 such homes.

Says Mr Pradeep Aggarwal, Founder and Chairman, Signature Global Group and Chairman, Assocham National Council on Real Estate, Housing and Urban Development, "The ascent in the number of families with higher extra cash is a decent sign. Particularly when this new classification of the better-positioned working class is liking to put its discretionary cash flow in private land. In the background of private market turning end-client driven and supporting government strategies making private realty more moderate, this new working class with higher pay will help the land".

He also said that “This new initiative of the government to handhold and promote businesses has come at an opportune time post-Corona when the market sentiment has improved and businesses are showing signs of recovery. The government is providing greater policy support to real estate and infrastructure as these are engines of economic growth. The move to improve ease of doing business will expedite the real estate recovery for its growth”.

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Real Estate Outlook for India in 2021

The effect of the pandemic in the Indian real estate sector was indeed unignorable. The highest employment generating sector in India just after agriculture, the real estate industry was predicted to experience a crumbling effect in the year 2020 as the country went under strict lockdown due to the COVID-19 virus threat. It did impact the progress of the ongoing projects that required the highest human intervention than any other sector and significantly lowered the projects' valuation. However, the Covid-19 came with a certain silver lining for the industry as well. The lowered valuation combined with RBI’s interest slash on the home loans made the year 2020 saw a strong rise in real estate sales. According to CBRE data, housing sales in the July-September 2020 quarter increased by a strong 86% quarterly. November 2020 recorded the highest number of residential registrations in Maharashtra in almost a decade.

However, proceeding further, the post covid era is expected to bring in some new challenges of the industry as well. The only way to survive these challenges is to be ready for the market demands. In today’s post, we will check out what can be the possible outlook for the real estate industry in the coming days.

OUTLOOK FOR THE REAL ESTATE INDUSTRY IN INDIA

Demand for affordable housing- The pandemic has proved the importance of owning a home more than ever before. It is expected that budget homes and mid-level homes are going to see a sharp rise in sales as the country recovers from the pandemic. The real estate developers are reporting that there are increased enquiries about the budget and mid-level properties and they are expecting good sales this year especially during the festivals.

Demand a better and healthy lifestyle- Life is more than just living in four walls. And this has been shown to us with fingers in the eyes by the coronavirus outbreak around the world. The people are now demanding the inside of the four walls and the life out of it. The properties that come with jogging tracks, open gardens, vegetable gardens are likely to be in demand for high-value properties. Simultaneously, the demand for plots is likely to grow in the coming days.

The demand for properties in 2 and 3-tier cities to go high- The emergence of the remote culture has triggered a reverse migration in the country which in turn has increased the demand for property in 2-tier and 3-tier cities. These cities are likely to see a continuous influx in the coming years and real estate demand is expected to rise in these areas more and more.

Ready homes will continue to be in demand- Just like any other time, the demand for ready homes will always be high, especially in Mumbai and adjoining cities where the rent amount is on the very higher side. The cut in GST rate for the residential properties has bridged the taxation gap between an under-construction and completed project which in turn increased the demand of the ready properties.

Conclusion

The low-interest rate in home loans and the reduction of stamp duty cost is expected to play a key role in the revival of the real estate industry in the coming days.

Are you looking for an investment in property in 2021?

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5 residential property investment hotspots in and around Mumbai

Real estate investment has always been a profitable venture, especially in Mumbai. The city and its surroundings witness population influx every year as it attracts people with its employment opportunities. And the fact also contributes to the upward trend of the property value in the area. If you are the one who is looking into purchasing a residential property either for investment or home, we have brought 5 hotspots in and around Mumbai, which you can consider.

5 HOTSPOTS IN AND AROUND MUMBAI FOR RESIDENTIAL PROPERTIES

Nerul

Located almost centrally, Nerul is presently one of the most happening residential and commercial hotspots in the city of Navi Mumbai. It is connected with Panvel and Mumbai via Sion-Panvel highway on either side and with Thane via Thane-Belapur Road. The mushrooming ITES parks and commercial complexes offer an excellent real estate property value in Nerul. The region is also known for its world-class educational facilities. Also, the location draws much of its brand value from the adjacent Palm Beach road.

Panvel

Located almost 40 km from Mumbai, Panvel has made its place in the real estate market over the years. The area falls under the Raigad district and is well connected with Mumbai, Vashi and Thane in spite of the distance via well-constructed roads and railway. Ever since the construction of the upcoming Navi Mumbai International Airport started near Karanjade, Panvel, the whole region of Panvel is increasing in real estate value by leaps and bounds.

Kharghar

Kharghar, at present, is the most developed node of Navi Mumbai. And while only Navi Mumbai, it is considered as one of the post areas in the entire area of Mumbai, Thane and Navi Mumbai. And its real estate value is in no mood to drip down anytime soon. Also since the area still has plenty of lands to offer, prices of residential as well as commercial properties in Kharghar are only going to rise in the future. Hassle-free connectivity, Taloja MIDC that comprises several small and medium-scale industries, the upcoming Navi Mumbai International Airport, and the aristocrat up class crowd already settled in Kharghar acts as the major growth influencers in the real estate property value.

Chembur

Located in the main city of Mumbai, Chembur has its own place in the real estate investment markets. The area has seen the rapid transformation from being an industrial hub to the present day up class residential area. And along with the transformations of the area, its property value too increased rapidly. Studies have shown that real estate property value in Chembur has tripled over the last 20 years. The famous commercial complex Bandra-Kurla complex being merely 7 km from Chembur, no doubt the Chembur at present is one of the most profitable real estate investment options.

Ghodbunder Road

The entire shape of the Thane real estate market has changed ever since the development of Ghodbunder Road and its adjoining areas like Manpada, Patilpada, Waghbil, Kapurbawadi, etc. The area is close to both Eastern Express Highway and Western Express Highway and it serves as the major USP of the area. With some of the renowned educational institutions, malls, and upcoming metro mail connectivity, Ghodbunder Road Thane is one of the most profitable real estate investment options in the Thane Mumbai area now.

Where are you considering making a real estate investment? Comment below.

Read our article on "THINGS TO KEEP IN MIND WHILE BUYING A NEW HOME"

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Impact of COVID-19 Second Wave Delayed the Revival of Commercial Real Estate

The COVID-19 pandemic has been deeply disruptive to real estate markets around the world. The initial stages of the virus from April/May 2020 onwards saw steep declines in demand, revenue and development across the board. Furthermore,  commercial sectors were among the most severely hit due to the change in work practices during the pandemic. The 2nd wave of COVID has seen a significant spike in infections which has caused many industries to slow down again after the brief improvement of late 2020 and early 2021. Here, we compiled data about the 2nd wave of COVID and its effects on commercial real estate.

The pandemic restrictions

The 2nd wave of COVID-19, which began in early March 2021, has been the cause of great economic decline throughout the nation. Citywide lockdowns in major metropolitan hubs like Mumbai, New Delhi, and Bangalore, along with strictly enforced curfews have been implemented to stop the spread of the virus.

Naturally, such steps have hindered demand for commercial real estate as people cannot engage in normal work or leisure related activities outside their homes. These restrictions have also slowed down ongoing construction, with a lot of the work having to be handled off-site. Perhaps understandably, potential real estate investors are choosing to wait and watch how the market progresses in the coming weeks before purchasing any properties. All in all, the 2nd wave has slowed down commercial real estate growth substantially.

The decline

According to JLL, the commercial real estate market has seen a decline in net absorption by 37% in Q1 2021. As per the study, only 2 major cities in the country, New Delhi and Bangalore showed a marginal increase in the market, with other cities reporting declines in the leasing of up to 33%. The reason for this has been generally agreed to be pre-commitments in newly completed projects.

Commercial space vacancy is on the rise as well, with the current estimates showing a 14.9% vacancy as compared to 14% in Q$ 2020 and 12.8% in March of 2020. This is not a good trend for a market that has been showing growth potential for years. Furthermore, the commercial real estate industry was hoping for a revival in 2021 to make up for the losses of 2020, which for now seems rather unlikely.

The revival

In spite of the currently unfavourable situation, there are certain positive indications that might hint at a come-back for the real estate market in the future:

Vaccination- Perhaps the best news in recent weeks for all economic sectors of the country has been the authorisation of vaccine inoculation for 18-45yr olds. Naturally, this bodes well for commercial real estate as well. With widespread vaccination, there should be a gradual but steady increase in demand from both companies looking for workspaces and clients looking for services.

A number of vaccine drives have already taken place in most urban-based companies. E.g. Greenscape Navi Mumbai, Exide Kolkata, and all major national corporates across states.

Pre 2nd wave growth- The steady influx of on-site workers from December 2020 to February 2021 indicate that there is still a workforce willing to utilise commercial real estate, with IT fields being the most prominent investors in such spaces. This may well hold true after the 2nd wave finishes, hopefully leading to a strong increase in demand for this market.

Better preparation- Most corporates of the country, including the real estate companies, are much better prepared to handle a COVID wave than they were in early 2020. With safety being given top priority, a lot of the work has been swiftly moved online and work from home is being encouraged. These steps plus the vaccination is expected to help limit the spread of the virus significantly which should lead to a quicker end to the pandemic.

Conclusion

While the 2nd wave of COVID-19 has been detrimental to the growth of commercial real estate, it is not expected to be the status quo for long. And there is every hope for a strong recovery of this market once the pandemic dies down.