Crisis & Opportunity Come Together For Real Estate Market
As the real estate industry pins its hope on the recovery in sales, the year 2020 will prove to be decisive for the real estate sector
The impact of Covid-19 on the world economy and industries continues to unfold. Despite measures taken by governments and healthcare systems around the globe, the spread continues unabated. In the coming few weeks, we will continue to see its impact across geographies.
These are difficult times for all of us! The entire human race is put to test with the spread of the Coronavirus. Markets around the globe have been impacted by this event. The real estate sector, here and elsewhere, is no different. With economies slipping, stock markets dropping to new lows every day, India Inc. too is witnessing a catastrophe.
The resilient industry
As expected, real estate markets across are impacted. The sector has been facing a myriad of challenges of its own and the outbreak of the virus has added to the overall problems. However, the situation is not as bad as it is perceived.
The outbreak doesn’t only mean that there will be a drop in sales. The general precaution requested and practised by the government has been playing on the sentiments and actions of people. This is visible in the number of enquiries of late. During my conversations with my industry peers, it is evident that sales teams across companies had been witnessing a good number of enquiries every day. Generally, the conversion of enquiries into sales takes time. But due to the advisory issued by the authorities, people are preferring to stay away from travelling to project sites, metro stations, malls and other such places of public gathering. While work from home is good, it is surely impacting sales, though, temporarily.
As a result, the conversions to actual buying may take more time than expected, but only for now. Sales will regain momentum and the industry will come out of this soon.
The industry has been performing well over the past two years.
Studies corroborate the belief. According to market data from the firm PropEquity Analytics, 2019 has overall performed better compared to 2018 as more projects got completed and there is a genuine demand for Ready to Move in properties. The firm’s findings add, developers with a credible track record in terms of quality and execution continue to witness robust sales numbers across projects.
As a result, established and proactive developers too have witnessed faster absorption across newly launched projects. But past and current challenges so far have kept the prices under check. This has prompted the smart, discerning buyers and investors to go out in the market and seek deals and reap gains from the offers.
However, the industry needs more in terms of support.
What is required?
As the real estate sector continues to wade, we believe that the sector will come out of the pandemic unharmed. The sector will continue to play a leading role in making the country a safe investment destination for the rest of the world in addition to domestic buyers and investors.
However, the government should do more in addition to the recently announced Alternate Investment Fund (AIF) and the proposed restructuring of loans worth Rs 20,000 crore. Though these will prove to be the immediate short-term measures, the sector needs long term solutions.
The government should bolster its efforts in implementing the ‘Housing for All’ mission. It should expedite the development and completion of current ongoing infrastructure projects at the city level. Simultaneously, it should focus on finishing the large, country-level projects which involves vast regions and affect demography of scale. This will lead to further growth of newer residential centres. Better facilitated, well-connected regions will lead to a healthy uptake of newer units that are being launched.
As we expect the markets to recover from the aftermath of the COVID-19, we expect an all-round recovery of sorts. The market, here by, will auto adjust itself and move ahead of the current
By -- Ankush Kaul, President (Sales & Marketing) – Ambience Group