How Will The COVID-19 Second Wave Impact the Real Estate Sector?
India has been hit by a huge second coronavirus wave. The economy has been impacted surely skeptically by the coronavirus wave. The real estate developer has manifested an eagerness to learn from the events that unfolded and impacted in 2020 lockdown.
Maharashtra, Delhi, Rajasthan are some of the major regions that are highly affected due to the Coronavirus outspread. The second lockdown has caused hindrance the real estate, where laborers are migrating outward. Let us have a look into the impact the real estate industry has gone through due to the situation of COVID.
Current Scenario of Real Estate in IndiaThe stringent restrictions and relentless rise of lethal COVID-19 have majorly affected the outlook of real estate especially that of commercial properties. The recovery witnessed in the past six months might get hampered in the real estate as reported in the analysis by CARE Ratings.
Upscale projects in urban areas have been frozen and reverse migration of under construction laborers is affecting real estate and significant adverse changes are anticipated for the prices.
Nowadays, Real Estate Companies are well aware and prepared for the situation thanks to improvised strategies and working in real estate. The recreation & retail activity has witnessed a downfall by 25 percent observed as of April 7, 2021, as compared to February 24, 2021, as per Google mobility data. Nevertheless, strict restrictions on Hotels, Shopping Complexes, and commercial places are confronting challenges and a drop in profit levels. in addition, there is no report when restrictions to visit public places will be uplifted.
Lessons Learned from Lockdown 1.0 and its Implementation
The outbreak of the COVID-19 is worse now but situations in real estate are not as skeptical as compared to Lockdown 1.0. the stringent lockdown restrictions are not imposed which were practiced earlier as only localized lockdown with the exemption for different activities is imposed by Government.
In 2020, a complete 21 days lockdown was announced that caused a major hindrance in work. As stated by the Construction Workers Federation of India that during 70% of laborers migrated in 2020 as compared to the previous scenario migrants aren’t moving in such a large number.
Learning from previous lockdown CREDAI (Confederation of Real Estate Developers Association of India) ensured to provide construction laborers proper accommodation and suffice their basic amenities such as medical assistance and groceries with better hygiene and safety.
The CREDAI assurance can be experienced with practices of COVID-19 regular on-site tests and medical isolation privileges provided. The assurance of on-spot medical attention and enhanced hygiene is a relief for laborers certainly.
The carelessness during the current situation is what makes it worse so it is better to practice safe distancing, proper sanitization along getting a jab of vaccine to prevent things from falling apart.
Expecting Quick Normalization of Situation
Government support and awareness of the current situation is likely to show a positive impact on the real estate sector certainly. The exemptions and localized lockdown by the government are making is helpful to get back to new normal soon. The awareness of Lockdown has highlighted the importance of housing assisting the sales of Residential properties. Online webinars and virtual home tours are some helpful tactics that are proven to be optimal for Real estate.
Given the choice of easier home loan availability, property affordability, and added benefits, customers are attracted to properties majorly.In addition, according to RBI’s new update on the cut of the repo rate by 25% is making home loans and residential properties an ideal deal for customers. Seeing the effective practices of real estate companies employment opportunities are provided as well which is surely a positive indication amid crisis.
The alarming spike of coronavirus cases construction activities in urban cities like Mumbai, Pune, Delhi, and others must be taken into consideration. desire to own your dream home and properties may drop amid trying times making customers hesitant to invest not knowing what’s next to come.
It is equally important to practice rightful practices such as virtual tours, minimal physical site visits, restrict unnecessary movement and proper sanitization to get back to the new normal. It is the need of the hour to be highly aware of the present scenario and take necessary precautions.
In the end, it can be said that real estate is being impacted majorly especially in a major drop in retail and recreation activity. However, with the lessons learned from the previous lockdown, and implementation of better strategies is being practiced to minimize the impact. The desire to get your own house among home buyers is prevalent and current interest rates are making home deals even more appealing but due to unprecedented situations customers may become hesitant to invest.
We expect situations to get back to normal quickly and once it happens the present curbs shall be put to an end. Stay safe and stay positive for the New Normal.
