After a dismal two years before 2019, the Indian Real Estate market did see a light at the end of the tunnel. It was tumultuous alright as we witnessed an up and down market. The Indian Government did come up with some sops for the property market amid the launch of the Real Estate Investment Trust and the graph was ready to head in the right direction.
Big players did gain lost ground and performed well both in sales and revenue as property rates stabilized to a certain extent.
All was well, till the invasion of the COVID 19 happened in March 2020 prompting a countrywide Lockdowns. The sudden brake paralyzed the Economy and with it the Real Estate Sector too due to the impact of Corona.
Found below are various factors which would affect the sector and the possible impact:
India has been witnessing a drop in Real Estate Sector prices since the first half of 2019.
Major Metropolitans have a noticeable fall in demand and inventory has piled up larger than before. The stringent laws and regulations have kept the prices at bay and despite that, the demand has not gone up appreciably.
The phenomena have not been common across the board as far as the percentage drops in prices go.
Mumbai, Delhi NCR has witnessed a steady growth with the drop in price, whereas Cities like Hyderabad and Bangalore have not registered sales despite a big drop in prices.
This has been the scenario before the early part of March 2020.
Ever since the first Lockdown was announced, many if not all were swimming in troubled waters.
In this, the Real Estate Sector was destined to be hit worse than any other sector. And the worst fears are coming true. Lockdown after lockdown followed with a partial lockdown are now in effect.
As such the March 2020 year ending saw the worst results in this sector and over the past three and half months Real Estate has taken a bigger thrashing.
Results from a study conducted by M/S Knight Frank have indeed thrown some light on what could be expected shortly.
More than 42% of the surveyed lot believes the worst would happen in the next six months which extends beyond 2020. Rents are expected to remain steady at best and may witness a slide if the Pandemic stays on.
The hallmark of any successful business is the launch of new projects consistently. Now, these have been rendered as impossible, and the struggle is on to finish on-going projects. The crisis has become more acute with the migration of laborers during the initial days of the Pandemic. It is indeed going to go be an uphill task for the real estate owners to bring them back and get work done. It is noteworthy that Northern and Western India are feeling the brunt more than other parts of India comparatively.
Nothing can alter the fact that Real Estate is the most preferred investment destination in India. Indian Property buyers are expected to wait and watch the prices before they dive in to make their purchase. A study does show that investment in Real Estate enjoys 35% with Gold well below at 28%. The COVID 19 and real estate crisis could work in the positive for the Real Estate Sector as consumers may feel owning a residence would make them more safe and secure. This would drive the demand upwards.
Sellers are indeed optimistic that the sales would go up in the ensuing period despite the Pandemic.
Rented space amounts to nothing and owning real estate is a wise investment.
The recent string of cutbacks on Repo rates by the Reserve Bank of India has shot down interest rates on housing loans considerably. This is a double whammy for the purchaser who can buy property at reduced prices and pay lower installments. If this practical thinking sets in, there would be a surge in demand.
Moreover, ever since the fall in demand since 2017, small players in the Real estate sector have been swimming against the current. Shutting shop was not a good decision and merging with the big players sounded practical and wise.
This kind of consolidation has been happening but it is expected to gather steam soon.
Evermore than before, Technology and Innovation have started making their presence felt in the Real Estate Sector in India and globally too.
India has allowed Technology into this sector in the recent past and has faced success in the development of efficiency, planning, operations resulting in the increased overall experience of its customers.
The past few years have seen the sector face adversity due to strict new laws that govern the sector. Moreover, the spurt in population and urbanization coupled with reverse migration under the threat of the Pandemic have only dented it more.
But all news is not bad news as technology advancements and developments in the Macro- Economy has brought forth a vibrant platform. This has led to the innovation of products and connected services in this sector.
Technovation which is Technology plus innovation would have four pillars. They are the Ecosystem, Services, Space and Product led Technovation.
This would aid technology to construct smart cities which would take efficiency and sustainability along with living conditions to a new level. The business system which is always obscured in its dealings would become more transparent and lead to a healthy competition.
The Government would play stakeholders and the citizens as investors. This combination would have a positive impact that would last forever to help the Real Estate Sector back on its feet.
It is clear now, that the COVID 19 issue is here to stay till the vaccines are found. The see-saw battle would exist and people would learn how to live the Virus and the impact of Technology would soften the crisis.
Once that fear is mitigated, it’s the normalcy that would progress. As mentioned earlier, Real Estate Investment is best and the turnaround is not far away.🔥90
In a world of rapid technological advancements, several innovations are transforming various sectors in an unprecedented manner. Restaurants are no… Read More
Dr K Rathnam talks about the transformation of animal breeding in India and how his company ensures native livestock development… Read More
the pop-up shop is a retail outlet a new era for retail marketing in India. pop-up shops are the miniature… Read More
Crypto Bill has been drafted seeking to ban all the private cryptocurrencies in India. But more importantly, the Government acknowledges… Read More
Vinayak Wadile Founder and CEO of Chessvicky setting new goals for the industry. No dream is too hard to achieve… Read More