Impact of IT RECESSION On Residential Real Estate

Impact of IT RECESSION On Residential Real Estate
Impact of IT RECESSION On Residential Real Estate

The IT or Information Technology field is known for paying hefty pay checks and loads of perks to the skilled workers. This field has seen recession in the last few months (All thanks to the Trump factor!) and it is believed to have a disheartening effect on all walks of life, including the real estate. Recession, as we all know, means scarcity of job and money-making opportunities in any given sector. It certainly means that the worker should be ready to face the phase of uncertainty and financial insecurity.
Similarly with IT RECESSION, many IT companies resort to lay-offs and also offer voluntary retirement schemes to settle the cost constraints during recession. Such harsh decisions create turmoil amongst IT workers and they hesitate in taking big financial decisions, like real estate investing during recession leading to a serious Impact On Residential Real Estate.

That is why buying a flat during a recession period is definitely seen upon as a critical step, more so because of it being a major investment. It is understandable and a popular belief that the idea of investing in real estate during recession is certainly not going to find many takers nor is it considered a valuable proposition by many investors. But, is investing in real estate during a recession really a thing to avoid? Let’s try to find out and assess the situation with an investigating lens.

Impact of IT RECESSION On Residential Real Estate

Normally, the scenario in real estate becomes gloomy when the IT recession hits. While some employees are made to leave the job; others are given a cut in the salary. Since there is no growth to be seen around, the IT employees prefer to stay away from the real estate. But, by doing certain calculations, one can manage to have advantage of the situations that exist during recession.
Recession is expected to bring certain degree of stability in the property prices, something that is sure to bring smiles to the investors in the long run. Another factor that is expected to create coupling effect is introduction of RERA. With a regulatory framework in place, the price of the property is surely going to stay stable and would be in favor of the buyers.

Impact on buying decision

Investing in real estate during a recession is something that is beyond the imagination of a salaried employee. Given the fact that the paycheck is not going to be as heftier as before and the job stability is a huge doubt and the focus being more on managing the regular or fixed expenditures.
Once the recession hits, those people considered as ‘hot leads’ by the realtors seem to be uninterested, start avoiding sales calls and maintain distance from such investments. But hold on, if you have played your cards right and have done extensive research, you would be able to pin down a property that is likely to move up the price ladder in coming times. So, real estate investing during recession or a no recession is not a strict ‘no-no’, but certainly requires a keen futuristic vision and a sharp eye on the market trends.

Should you go with that deal right away?

If you are in middle of a deal when recession hits the stability in your life, then you may think it is not a wise decision to ink the papers right away.
Having a job but at a low pay package is not something too disheartening and is surely a better proposition than having no job. So, analyze your situation critically and then decide for yourself if the recession conditions can still help in meeting your investment objectives. Buying decision depends a lot upon the fact how desperately you need a house. If you are buying property from an investment point of view, then analyze how recession is going to affect your financial scenario.
Sometimes, your finances are strong enough to support buying property even when the income position is in doldrums, but whether as an investment or for own purpose, you know what serves you best as per your financial propositions and when and what kind of returns you are expecting. Again when you are investing, the market conditions, location, economy are important factors, and if you are looking for a house investment for your own stay, then consider if you could manage the huge finances and payments or continue staying in your rented/leased/PG/Hostel accommodation.
It is best to thoroughly compare and weigh all you options, before looking at an investment. Hence, it is always better to wait for sometime, do a comparative research study, so that you get a clarity about any changes ensuing in market rates.

Impact of IT Recession on Residential Real Estate
Impact of IT Recession on Residential Real Estate

Situations that will influence your investment in real estate during a recession

Recession brings various changes in the ecosystem of real estate sector. Low demands compel realtors to make offers that are too hard to resist. So, if you are brave enough to stick to your investment plans even during a recession, here are some conditions that can boost your confidence:

More competitive pricing

Since there is a distinct correction in the prices of the properties, the monopoly of a few sellers receives a hit. The handful of sellers who peg the prices on quite an exorbitant side are forced to move along with the prevailing situation. As a result, when recession hits, you may find considerable decrease in price and tons of discount, offers and freebies floating around.

  • Loans available at low rate

A certain degree of respite is pumped from the banks that slash down the interest rates on housing loans. Those people who have made huge savings can definitely consider recession in IT as a chance to make their dream home into a reality. So, low interest rate on housing loan is another impact that one sees in real estate sector at the time of recession.

  • Emergence of affordable properties

During the period of recession, it is quite profitable to invest in areas that are branded as ‘affordable’. Investing in real estate during a recession is made easier for the investors by making loan terms easier and flexible.

If you can manage to enter into a fixed rate sort of agreement, you are likely to make the best of the situation and would end up paying less, as compared to others for the property. It would help you earn lot of margin later when the market picks up.

How to manage EMIs during a recession

EMIs are not going to come down; let’s accept this simple fact! So, if you are in middle of a loan term, it is better to schedule expenditures in such a way that EMIs are not missed. Defaulting the payment affects credibility and poses threat to the ownership of the property. By avoiding filthy rich restaurants, air travels and unnecessary honeymoons and babymoons, you can save a lot and have finances diverted to the EMI payments. Keeping family in loop is very important so that people around you also tone down their expenditures and expectations.

Impact of IT RECESSION On Residential Real Estate
Impact of IT RECESSION On Residential Real Estate

Taking the final call and giving real estate a miss? Think smartly!

Going by normal perception, one may think that recession in IT is synonymous to slump in real estate. But, this is certainly not the case. In fact, buying a flat during a recession can prove to be profitable proposition as the realtors try to create conditions conducive for an easy purchase. Customer satisfaction and buying sentiment becomes the main focus of the realtors and they try to pitch in as many customer-friendly schemes as possible to improve the probability of hitting the deal. While the impact of IT RECESSION On Residential Real Estate may be crunching, you may cash on in this situation; in your favor and get the best in property deals on some worthy projects only on 


It is necessary to always remain prepared for managing the uncertainties of the future. This is why; it is advisable to save major portion of the income and invest it in right avenues where the chances of getting huge returns are bright and assured. Such practices can help you sail through the recession time without losing your mind.