BUYING PROPERTY DURING PANDEMIC IN 2021

BUYING PROPERTY DURING PANDEMIC IN 2021 – The economy is crushing, and affected many industries including the real estate and property market. Although the industry has a decrease in sales, property as an investment instrument is one of the so many choices for corporations or individual investors with a healthy financial record to build their wealth, even during the pandemic.

Property is a sector that has a very high buying and selling price. Besides being able to be used alone, not a few people also buy property to be used as future investments because they can get huge profits. 

However, since Indonesia was infected with the coronavirus or Covid-19, property has been affected. The buying and selling power of the community towards property such as new or used houses, whether for housing or investment, has decreased. As a result, housing prices in several cities have also fallen. 

This happened because many employees were laid off and their income decreased. So, they prefer to refrain from buying a house for a while. Then, divert home savings to make ends meet during the Covid-19 pandemic.

Some may be affected, while some others still follow their timeline of developing their new investment strategies whether it’s developing new property or buying it. Like I saw myself in Bali for example, some of the new hotels in Bali continue their development and actually open their doors, although the international borders are not open yet, they intend to introduce their brand to the domestic market first, while waiting for the international border to open for international travelers.

 

But how with home ownership loans?

This was also supported by the government's policy with Bank Indonesia (BI), which reduced down payments by 0 percent. BI's move to implement this policy after responding to the latest developments both globally and domestically. This policy is an accommodative mix in line with efforts to continue to promote economic recovery while maintaining financial system stability.

Bank Indonesia (BI) relaxed the loan-to-value loan and property financing provisions to 100 percent. With this easing, the down payment (DP) is 0 percent for Home Ownership Loans (KPR). This rule will be effective from March 1, 2021, to December 31, 2021.

As quoted from detik.com, the results of a survey by Indonesia Property Watch (IPW) regarding home sales in the Jabodebek-Banten area decreased by an average of 50.1% in the first quarter of 2020. In detail, the sales of house prices below Rp. 300 million decreased by 62.5%. Meanwhile, at home prices above Rp 1 billion, sales decreased by 46.0%.

With the decline in sales, developers automatically start to offer a lot of offers from the payment side. According to IPW, many developers provide a large enough discount that the developer can pay money.

Contemplating whether it’s good to buy or rent your next property during the pandemic?

This pandemic situation pushed people into the Work From Home (WFH) condition, and the work becomes remote and flexible, individuals who’ve their earnings are not affected but the current economic situation and the budget for commuting from home to the office can be allocated to another investment opportunity, such as property. If you have a plan to buy property in the near future, you can check your plan with your current financial condition with Mortgage Calculator

So, with all these offers, is now the right time to buy a house? Of course, for those of you who are now in a safe financial condition and have sufficient emergency funds, buying a house is now an option, why not?

On the other hand, property observers also provide a view of whether it is the right time to buy a property? They think that the corona pandemic should not be used as a barrier to buying a house for those who have stable financial conditions. In fact, this is the perfect moment to buy a house, whether for housing or investment.

Other advantages, are not only are house prices being discounted, but you can also enjoy affordable mortgage rates from banks, and an easier property buying system to other offers.

Even millennial-adult now changing the luxury real estate market in the U.S. alone, according to a survey by the National Association of Realtors released last year. “They’re just as interested in owning a home. They just waited longer to buy their first one,” says Bradley Nelson, chief marketing officer of Sotheby’s International Realty. At 38%, millennials—adults born from 1981 to 1996—represent the largest share of home buyers in the U.S

Wherever you are, if your current financial status is healthy, you may consider putting your money in property as an option, whether for housing or investment.

Images: Photo by The Lazy Artist Gallery & PhotoMIX Company from Pexels