Pune-based Gera Developments MD Rohit Gera said, “Real estate sales are at a standstill. So far there has not been any reduction or crash in prices of homes."
The nationwide lockdown for next 21 days amid spread of coronavirus will severely impact residential real estate as housing sales have almost come to a standstill, which could affect builders’ cash flow and lead to default in repayment of bank loans, according to property developers and consultants.
Market experts also fear that existing customers might delay payments of their instalments to developers, who in turn could default in repayment of principal and interest on bank loans.
Developers may hold on to apartment rates, but prices in the secondary or resale market could fall, they said.
To mitigate the impact, developers and brokers are adopting digital marketing tools to reach out to prospective home buyers.
When contacted, realtors’ apex body CREDAI President Satish Magar said the lockdown will greatly impact the sales transactions and new launches will be deferred.
“There are chances of many customers defaulting on their instalments because of tough economic conditions. These will have a cascading effect on developers-who will be battling with servicing their debts as cash inflows will be strained,” he added.
NAREDCO President Niranjan Hiranandani said overall sales numbers have dropped.
The lockdown has opened up opportunities for digital platforms for sales and marketing activities, as also payments, he said.
Bengaluru-based Puravankara MD Ashish R. Puravankara said: “At this point, no property registrations are taking place and all new project launches are postponed”.
As all construction sites are under lockdown, there will be a delay in completion leading to an increase in the interest cost, he added.
“Additionally the lockdown could hamper the cash flow cycle of the developers’ balance sheets and could result in bank defaults”, said Ashish.
Anarock Chairman Anuj Puri said the lockdown will have a negative impact on housing sales and new launches during the auspicious festivals of Gudi Padwa, Akshaya Tritiya, Navratri and Ugadi.
“This is a time when AV technology to enable virtual site visits and walk-throughs will gain increased relevance and use,” he said.
Anshuman Magazine, Chairman & CEO (India, South East Asia, Middle East & Africa), CBRE said: “It is too early to comment on the impact of Covid 19 given that the situation is still evolving … We are confident that once the situation normalises, sales will resume”.
Dhruv Agarwala, Group CEO, Housing.com and PropTiger.com, said the lockdown will have an adverse impact on real estate.
“We too have begun to see a dip in traffic on all our platforms,” he said, adding that the company has come out with innovative schemes for builders and brokers to advertise on its websites.
Siva Krishnan, MD (Residential Services and Developer Solutions), JLL India said the lockdown will definitely have an impact on housing sales, but briefly.
Shalin Raina, MD- Residential Services, Cushman and Wakefield, said the complete lockdown means lesser sales since most of the transaction closures happen only after site visits.
Housing prices have corrected by 15-20 per cent in the last few years and further decline is unlikely, Raina said.
Savills India CEO Anurag Mathur said: “Housing sales may see a sharp dip for at least the next one quarter… Even if the situation settles down quickly, it may take time for homebuyers to come back to the market.”
“Price elasticity is not a concern under the circumstances since the transaction activity is at a standstill anyway. Depending upon the duration and depth of the current crisis, prices may or may not see a downward movement,” he said.
Omaxe CEO Mohit Goel said the recovery in the housing segment has been halted.
“As for real estate prices, there will be no change as transactions are not taking place. The prices will resume at the level it has halted,” he said.
Gaurs’ MD Manoj Gaur said, “The sales are impacted, but it is temporary.”
Supertech Chairman R K Arora said, “housing sales have completely gone”. There are no buyers in the market.
Pune-based Gera Developments MD Rohit Gera said, “Real estate sales are at a standstill. So far there has not been any reduction or crash in prices of homes.”
“In the absence of some relief from the government, more real estate developers with debt obligations will default on account of the stop in cash flows thereby impacting the economy and jobs,” he added.
M3M Director Pankaj Bansal said housing sales would get impacted during this period of crisis, but it would also create a pent up demand once things get back to normal.
Experion Developers Senior ED Ananta Singh Raghuvanshi said, “Sales closures are temporarily getting pushed ahead. Prices won’t change.”
Raheja Developers ED Nayan Raheja said the sales and construction are badly impacted and at standstill.
ABA Corp Director Amit Modi said the sales velocity has definitely been slow.
Gulshan Homz Director Deepak Kapoor said, “People are deferring property buying decisions.”
PropEquity MD Samir Jasuja said: “For the real estate sector, this is a tough situation as it was just finding green shoots of recovery. We believe for the next few weeks, we will not see any new transactions for housing sales”.
Ambience President (Sales & Marketing) Ankush Kaul said: “Housing sales will be impacted for the next few weeks.”
Ekta World Chairman Ashok Mohanani said the lockdown has affected the business cycle deeply. Wadhwa group, Head – Sales, Marketing Bhasker Jain said the lockdown has impacted sales and the company is offering cashback on online bookings.
Brokerage firm 360 Realtors Ankit Kansal said the activities have come to a standstill after lockdown. Sales were down by 30-40 per cent during the first three weeks of March.
Investors Clinic Founder Honeyy Katiyal said sales would be impacted but not the price.
Wealth Clinic CMD Amit Raheja said, “It will hamper sales to a large extent, but we expect a good turnaround once the situation returns to normalcy.”