The real estate sector would need to work out the new ways to effectively deal with the emerging dimensions to sustain itself.
COVID-19 has impacted all of us in many ways, changing our lifestyle, values and beliefs significantly. Given that our collective memory is short, as evidenced by past events, COVID is still going to have a much longer lasting impact on us. And some of this will become permanent part of our conscious, the ‘new normal’. The way we live, and more so, the way we would want to live is going to impact the realty sector in a big way.
The sector will have to reinvent itself to understand, comprehend, plan and implement in new innovative ways to meet the emerging new requirements. The time for ‘Business as Usual’ is over, and creative disruption shall be the norm. While it will prompt the real estate sector to go back to the drawing board, it also offers new avenues to explore new innovations as also to fast-track incorporation of new technologies, be it construction technologies, home automation, IoT or AI. The planning would need to incorporate altered norms of social distancing, mobility, density and health considerations.
The concept of Work from Home has indeed caught up across the spectrum but is specifically significant for the millennials in the IT and related sectors. Post COVID, the offices shall buzz again, but definitely not as earlier. This is going to greatly impact the commercial and residential segments, which will also need to factor in the requirement of increased spacing and other health concerns. The e-commerce picking up in a big way during the pandemic is also going to largely impact the shopping malls and warehousing in different ways. The lesser need for travel for work or tourism will reduce demand for the hospitality sector requirement of space. The disruption during the pandemic would also drive the potential buyers to go in for near completed properties rather than during launch, except for the brands they trust. The real estate sector would need to work out the new ways to effectively deal with the emerging dimensions to sustain itself.
However, urbanisation is not going to stop, but will slightly slow down surely in the aftermath of the pandemic for some time. Accordingly, the demand for all asset classes is going to be there and increase over the time. However, the product and factors which would excite the customers shall be different from what we have today. Possibly living in the crowded downtown may not remain the preferred choice and the demand may prop up for satellite townships, offering much better quality of life. The marketing of properties will undergo changes, wherein the focus will be on the specifics which are included to make them feel safe. Be it, appropriate public spaces, voice activated controls, safer centralised air conditioning, larger lifts etc.
The planning for residential complexes and specific housing unit is expected to change immensely. While larger public spaces and circulation areas would see an increase, the large swimming pool may be a thing of the past. The individual home would need to have a place or two to double up as the office for self or spouse or kids. The requirement of higher personal spacing, as also for open areas like balconies, would likely push up unit areas. Similarly, for office spaces, the need for social distancing would mean redesigning of cubicles and workstations. The centralised air conditioning would also need technological interventions to prevent circulation of viruses. In all the cases, need for avoidance of touching controls for lifts, lighting etc, would mandate using voice activated controls. IT interventions for uninterrupted availability of high bandwidth internet would be mandatory, as also higher capacity or increased number of lifts would be the norm.
The current real estate scenario with a large inventory of delayed and still unfinished houses would drive the buyers towards nearly completed projects, requiring the builders to put in much larger investments into their projects. Servicing these increased investments would create additional financial burden, which will necessitate completing the projects in the shortest possible time for them to be able to sell their properties to the buyers to generate resources. To minimise the construction time, use of construction technologies would be imperative. The technologies for modular construction, like precast systems, formwork systems, steel construction etc are already in vogue to some extent, but post Covid will become a norm. These technologies would also be mandated by the non-availability of labour, especially migrant workers who may not return back fast enough. The requirement of quality for the much aware customers of today, also calls for industrialised construction in a big way. The Covid pandemic would definitely fast track this process of transition to new technologies.
No one is sure when we shall get over Covid or at least the fear of it, but it is definitely going to change the reality sector significantly, most probably for the better. This might be the inflexion moment for the real estate sector enabling it to think afresh and reimagine in this Covid reality.
(By Rajesh Goel, Director General, NAREDCO)