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    How real estate prices will be post COVID-19 crisis?

    Published on June 23, 2020

    By: Mr. Pankaj Kr. Jain Director-KW Group.

     

    Today, the social media is quoting, ‘Life won’t be the same post lockdown’ and to a large extent, the present situation of the country economy reflects the same. Experts are have divided opinion on the issue, but from a neutral perspective, things and businesses will have deep and longing after effect. It is being anticipated that post lockdown there would be overall price variations for various things which include not only small scale business but large scale as well. One of such large industry is Indian real estate. Looking at the current situation, it might look that future is darker, but it is anticipated that year 2020 will have more attraction and it will boost the real estate sector. It might happen that the year turns out to be the most promising if one wisely invests in it.

     

    According to experts, strategic investment is the key to gain in this situation. If we talk about human psychology, we invest with a motive of good returns. And if we look at the present time, real estate looks to be a wise medium to invest because of lower prices which will give higher returns in the coming months. Also, the degree of risk involved in the sector is minimum, as the real estate business is likely to increase the curve rather flattening.

    If we go with the analysts, everyone is optimistic about the future of the real estate industry in the country and look forward to brighter days. According to a survey, it is believed that 2020 has great potential for both residential and commercial real estate businesses. The study clearly mentions that in the last couple of years, co-ed office space has gained impressive traction in most cities with IT/ITeS players contributing to most of the demand.

    Keeping the track record in mind, experts suggest that, to make it a smoother financial year ahead for investors and developers, government needs to take more quick and bold corrective measures for the housing and urban infrastructure sector. This will acutely affect the demand and supply chain and can be boosted to an unprecedented level. Another finding clearly states that as and when bold and corrective measures are implemented by the central government in this direction, it will boom the concept of co-living and it will see widespread acceptance in India, which will work as the shining star for the real estate sector after this darkening phase of COVID-19.

    As of now, the market looks dull because everything is in standstill mode. The national lockdown has put ongoing projects on hold, as supply and availability of raw material and labors are stopped. Also the scarcity of necessary work staff has lead to a negative impact on the market as a whole. While market players have been trying to overcome the loss via attractive offers, discounts, and lucrative loan offers, but the situation will take time to shape up, informs industry experts. In the opinion of experts, the prices are down at the moment, but once the situation normalizes, it is expected that the property prices will spike at a rapid rate. That’s the reason it is being suggested that the ongoing lockdown is the right time to invest in real estate to gain maximum returns in near future. It is also being forecasted that the sector will rebound with a bang and there will be a steep increase in demand and supply both in the commercial and private housing segment near to the festive season of Dussehra and Diwali. From the psychological angle, it is being perceived that the lockdown has made people understand the value of a comfortable home and it is expected that after lockdown, people will put stress on owning a home, as per their budget. Keeping the same in mind, market players are also redefining the housing projects to offer the best. After all, investors always wish to gain maximum return on their investment.

    Regarding the commercial segment, companies, their workforce, and subsequently their space requirements shall continue to increase once normalcy returns and all businesses get their operations back on track. There is also increased interest from foreign investors in the said segment, so, here is a lot of money waiting to be put into the commercial sector. The continued fiscal and monetary support of the Central and State governments, as well as of the Reserve Bank of India is indeed essential to bring businesses back on track. A few revisions in the Goods & Services Tax, the Stamp Duty and registration charges can be helpful. Besides, interest rates could also be decreased.

    If one has already invested in the real estate, then post-corona, one can expect a good return of their property. This is what the latest analysis of the real estate sector predicts and looks practically promising too. It is obvious that post lockdown, the prices will lead to lesser risk in a smaller market. Also, it is expected that in smaller geographical areas, bigger players won’t jump and this would give a wider scope with high returns to the market players and benefit to investors too. With the uplift of lockdown, the real estate has geared to gain all its strength and working in a full swing so that it resumes and revives. Real estate experts are eying on the brighter side and also believe that this phase will help understand the governing body, the loop holes in the industry and brings in corrective measures to secure the interest of investors and market players too. It is expected that in 2020, the Indian real estate system will exhibit more financial discipline, accountability, and transparency. All this is expected due to the structural economic policy reforms introduced in 2019.

    Experts believe that the situation will not get ugly, as the government has enough foreign reserves. India is one of the top countries receiving foreign funds from NRIs. This will help balance our currency. The currency risk is less because we get so much inflow.Another segment of experts is of the opinion that real estate prices in the medium to long term are likely to show an upward movement in the post COVID-19 world.

    As we are approaching towards lockdown 5.0, it is further expected that the property prices may be effected in the coming days but the intervention of government is likely to make it a better place in the coming quarters of the financial year.

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