The ongoing wave of corona virus is proving to be less tumultuous for the real estate industry as developers had resorted to digitization during the last year’s lockdown and the ensuing months.
The Corona pandemic last year had taken the world by surprise and proved to be extremely strenuous for businesses and industries. While all industries made efforts to tide over the problem, it was real estate which showed remarkable resilience and embraced technology in a major way to witness a sharp recovery in the second half of last year.
The second wave has slowed down that recovery process to an extent. A section of the prospective home buyers is adopting a wait-and-watch-approach till the current wave ebbs.
However, the ongoing wave of corona virus is proving to be less tumultuous for the real estate industry as developers had resorted to digitization during the last year’s lockdown and the ensuing months which is helping them to be in constant touch with the customers, take action upon the digital leads generated and promise them at least a virtual experience of their future home. All this is possible because the industry has been involved in the assimilation of new-age technology and brought many of the processes involved in property purchase deals online. Technologies like 3D Walkthrough of the properties, Augmented Reality (AR) and Virtual Reality (VR) have been deployed by the industry players, obviating the need for home buyers to physically go and check the properties.
GDP Growth Outlook of Indian Economy
Many global rating agencies and financial think tanks although had to trim the growth forecast recently due to the second wave of the pandemic, they are still optimistic of a good performance by the Indian economy. Even rating agency Fitch is optimistic that the second wave will harm the economy less than the first one. “We expect the shock to economic activity from the latest wave of the pandemic in India to be less severe than in 2020, even though caseloads and fatalities are much higher. The authorities are implementing lockdowns more narrowly, and companies and individuals have adjusted behavior in ways that cushion the effects”, it has said recently.
The stock market too has taken the second wave in its stride, albeit a few hiccups. While last year the stock markets had crashed when the virus caseloads were raging, this year they have shown an accommodative stance for the same.
The industry is in a slowdown mode this year also because of the fact that there have been only partial lockdowns in various states of the country. Although businesses are faced with the grim scenario currently, there is some headway for many of the business activities to go in a prudent manner.
Only partial lockdowns have ensured supply chain of raw materials this year for the developers who don’t foresee much delay in the delivery schedule of their projects. Even the migrant laborers are, more or less, continuing to stay put at project sites this year, if myriad safety measures are put in place by the contractors or developers.
The pandemic has led to growing realization among people to have their own homes. The current low interest rates for home loans are letting them do it more easily. With work-from-home (WFH) continuing on, there are a lot of employees of companies who have moved back to their home towns and now want to buy a home for themselves there itself as there does not seem to be an end to the WFH regime anytime soon. This is leading to a shift of buyer’s interest for Tier II-III cities as well.
There is not denying the fact that the both new launches and sales figures have been dented to an extent in the last 5-6 weeks. However, if the current vaccination picks up a stable pace in the coming months, it can initiate movement and help the industry reach a decent growth trajectory.
(By Nagaraju Routhu, CEO, Hero Realty)