Disruptions in the business cycle are bound to impact the demand for commercial as well as residential spaces in the real estate market of India.
By Farshid Cooper
The novel Coronavirus which started in China’s Hubei province has been declared a global pandemic by the World Health Organization (WHO). Over the last three months, we have witnessed the world crumbling from its exponential and contagious impact and the global economy going through turbulent times. The Indian Government is taking all measures to ensure that the country’s collective healthcare system is able to curb the spread of COVID 19 through lockdowns and restricting any public movement.
Leading real estate developers are urging societies to observe social distancing and remain isolated, and follow the Government’s directives to avoid the spread of the virus. Developers and societies are sanitizing common areas and have closed all gyms, pools, club houses and parks. Additionally, the entry of outsiders has been completely stopped. Hand washes and sanitizers are placed at every entrance and common areas of society. Societies have also requested residents to avoid gathering in groups or allow children to play in compounds.
Temperature checks are done for vendors and delivery agents at the entrance of societies. If they have a fever, they are asked to not enter the society and rather, residents are called up to receive their parcels.
Developers have come forward and willingly restricted public gatherings, postponed their project launches and cancelled channel partner meets in the larger interest of the society. Developers are encouraging digital launches to avoid any form of human-to-human contact.
The realty sector like other sectors are witnessing tough times with new launches getting stalled, the commercial and retail sector is seeing a huge slowdown and people are not opting to buy properties. The festive season which was expected to see a surge in demand owing to Gudi Padwa, Ugadi, Akshaya Tritiya and Navratri, which are considered to be auspicious occasions for launching new projects and also buying new properties, will not be the same this year.
The unfortunate outbreak of COVID – 19 has led the economy to a volatile situation. Disruptions in the business cycle are bound to impact the demand for commercial as well as residential spaces in the real estate market of India.
People are avoiding stepping out of their homes and hence there is a dip in walk-ins across all residential projects too. Investors, as well as end-users, are opting for a “wait and watch” policy amidst the pandemic. However, once the situation improves, we expect affordable housing to thrive as demand may continue to exist considering intervening government incentives associated with it.
(The author is Managing Director, Spenta Corporation)