The entire world is under the mercy of the novel Coronavirus and India is no different. With the exponential increase in corona positive cases, the crisis is worsening. The real estate sector is not spared either. But with every pandemic, comes new opportunities to thrive and reinvent the business.
This is the time for the real estate sector to understand, comprehend, chalk out a solid plan to emerge in innovative ways. And real estate companies are fighting to come stronger than ever. The Nation Capital Region (NCR), which is the real estate hub of North India has some builders who have deterred to provide undeniable solutions to combat the situation.
Various trends can be seen in the real estate industry like –
Delay in construction activity and cost increment
With the nationwide lockdown that started in late March, the property transactions came to a dipping zero point. Construction activities were at a halt and it completely eroded the market of its potential buyers. The next few months saw labour migration and drainage of workers from the site which caused even more delays than expected.
Buying a home was not even an option for people during the brink of the pandemic. The real estate sector saw tough times due to ceased activities in construction sites. Petrol prices hiked, which caused even more inconvenience to the cash-starved developers. The dependence on supply chains, labour migration, cost overruns, and liquidity constraints have shackled everyone who is even slightly related to the industry.
Increase in demand for the mid-budget home with new flexible facilities
Residential real estate companies are already in the game to win. From digitizing the home buying process to providing high-tech solutions in societies to combat the virus, developers are leaving no stone unturned to improve the current conditions.
The pandemic has not only caused a delay in construction but has also increased the inventory of ready to move-in properties to sky-high numbers. It is estimated that around 6.24 lakh units of unsold inventory worth 3,70,000 crore is present in the top eight metropolitan cities including the major cities like Delhi and Chandigarh in North India. A recent survey by JLL revealed that the average time to clear this stock might take up to 3.3 years, considering the current COVID-19 crisis.
Until 2019, before the pandemic, the general trend of buying a home was towards the crowded downtown or ‘central part’ of the city. People wanted to buy properties in the major area of the cities even with exorbitant prices. However, in the current scenario, the preferred choice is shifted to satellite townships. Due to social distancing norms and guidelines people need bigger spaces and freer movements that offer a much better quality of life. The marketing of such properties is changing in the north Indian real estate sector.
Another change in the trend is the rise of work-from-home culture. Earlier this concept was a luxury and only available to a few people. Today, work from home has become a need of the hour. People would be encouraged to stay at homes until the virus decides to leave which can extend up to an indefinite number. Builders have quickly adapted to this strategy and are now coming up with flexible homes that can accommodate home offices.
This could mean there would be an increase in open areas through larger balconies and windows to reduce cabin effect on people. Flats with separate living rooms and working areas are promoted to facilitate the bread earners of the family.
Impact of Crisis on Commercial Real Estate
With the onset of novel coronavirus and social distancing rules, the commercial real estate sector hit the rock bottom. Public spaces like retail shops, malls, and cinema halls are still facing a cruel crisis. With the present construction and design of communal spaces, it is impossible to see their revival in the near future unless the builders come up with some crucial changes.
Co-working spaces will see and reduced demand due to the current scenario. But reduced demand will counter to the larger spatial needs of humans. Some design remodelling is needed to assign larger spaces which will be a norm now. Office rental might not see any significant shift.
In larger office spaces, companies have already started investing in increased safety of the employees. Disinfecting the air-conditioned spaces to stop the spread of the virus, voice-activated controls with fewer touchpoints, larger lifts, and safer cubicles are some of the major priorities that would be dealt with, at the soonest.
Measures by developers to ensure the safety of homebuyers
Real estate builders are now coming up with safer home buying options for the customers. It is not only about offering discounts and reducing prices but realtors will provide freebies to lure the people into buying properties.
Builders should also address the underlying fears of their prospective clients like, ‘what if I lose my job in three months’ or ‘what if I get coronavirus’. Experts suggest that real estate companies will have to come up with innovative solutions to revive demand. For example, a builder may promise price guarantee options to promote sales. This means that if in future the prices of property drop and the buyer loses his job, the developer will purchase it back from him. This will ensure a sense of trust in the people and therefore, an increase in sales.
When it comes to developing the properties, many safety measures need to be taken like installing communal washbasins for hygiene, installation of bigger lifts, a total ban on public gatherings, temperature screenings of workers on site every day, and strict supervision on visitors in societies. In every part of the country, special north India, developers are promoting hygiene by scheduling regular sanitization activities in the communal area and positioning sanitizers in all the public spaces.
These are a few of the tactics that real estate companies are taking to thrive and survive the pandemic. Booster shots like these, are needed to revive the real estate and construction sector.