The ongoing Coronavirus pandemic and its impact on the economy is unprecedented and detrimental. While the world is fighting to curb the spread, the business sector has gone to a grinding halt. Further, like everything, its impact on the real estate industry, both in residential and commercial sectors has pushed it to its all-time lowest level in the last quarter, that ended this March 2020. The industry was already facing global economic slowdown and this was coupled with COVID-19 that worsened the case and negatively impacted the industry. The fate of industry is on a standstill position with recovery curve depending on the actions of the government.
Largely, this pandemic had accelerated various trends in the real estate sector. For instance, demands of online shopping have increased while residential and commercial property is now under scrutiny. The real estate has been crippled by this pandemic. There are many reasons present that one can allude this to. The new launch on projects of commercial and residential property is halted and further people are finding it difficult to complete the ongoing projects because of construction halts and lack of workers and labours on fields.
Pre Coronavirus scenario, the residential sector was struggling with project delays, regulatory changes and lower scale graph. The situation is different but the effect is pessimistic. For instance, if you are a homebuyer who was expected to possess home anytime soon, this lockdown will delay your plans as construction in incomplete projects is on complete standstill. It’s not just about the lockdown, even when the lockdown is released, developers will take more time than usual to restart as workers and labourers have migrated to their place and horror of the pandemic might push them to stay in their homes for long. Secondly, the time of uncertainty calls for money monitoring. Thus, people avoid big-ticket purchases and hence the sales of residential have fallen. Lastly, commercial space will be affected majorly as it involves Mall operators mainly. The worldwide closure of Malls due to social distancing will affect their fate.
Not just to upcoming projects, the prices of present properties saw a dip since lockdown. On an optimistic side, this comes out as a great time for potential home buyers with job security and cash flows to invest in a property with a lower rate as this will be an excellent buying opportunity considering real estate is an important asset of all the assets. It is a complete buyer’s market. Acknowledging future scenario, some experts have suggested that this pandemic will result in property dipping by at least 10% of pre lockdown prices.
It would be no wrong to say that residential purchase is an asset in all investment. The real estate sector of the country has survived many past challenges of demonetisation, implementation of RERA, an introduction of Good and Service Tax (GST) and crisis between NBFCs and developers. Hopeful it will survive this too.
While the exact extent of the damage is difficult to grasp right now where every day is under the limelight, one thing is certain that country’s realty would suffer short term shocks, courtesy Pandemic. The question is definitely of the survival of the fittest.