Impact of Coronavirus on Real Estate Companies in India
COVID-19 pandemic has brought the global economy to its knees and the real estate companies in India have experienced their worst hit after decades now. Among the three major hits, namely – Demonetisation, Real Estate Act of 2016, and Coronavirus, the pandemic had the worst impact on the real estate sector. Migrating labour, social distancing, zero travelling, and property purchases dropping to zero – there are many factors affecting the real estate companies. While the fate of real estate down the year is still in shambles, there are no solid speculations about the future few years.
All the stakeholders related to the real estate companies in India, are anxious over the business prospects and blocked investments. For all our readers and the stakeholders of the real estate sector, we have compiled the following post. Here, you can read about the impact of this pandemic on the real estate sector and also explore the future trends and expert speculations
Let us move on, and explore the subject in detail.
How Coronavirus affects Real estate companies in India?
While we are discussing the impact of COVID-19 on the real estate companies in India, there is another thing that deserves mention – conflict with China. The imports from China were already on a hiatus because of the pandemic. But, the recent conflict with China has marked a stop of export and import activities.
The real estate companies in India import the following items from China:
- Solar Panels
- Plastic and Fibre Construction Elements
- Technical and Innovative Construction items
- Iron and steel products
Further, steel is one of the main commodities used in construction, of which China is the largest producer. While India stands second in steel production, the capacity of production is severely lacking in terms of fulfillment. As per the market experts, even if the imports from China are reinstated, the rates will be higher than previous ones and the profit margins will be greatly reduced by that.
With an increase in the number of infections in India, the conditions are even gloomier. In fact, as per the latest stats (FICCI-NAREDCO), the sentiment index for the real estate sector is at an all-time low – 31. While the buyers have put a hold on their home-buying decisions for an indefinite time, the realtors are looking at dropping the prices for making more lucrative offers to them. Further, there is a huge inventory of more than 6 lakh units that are lying unsold only in the top metro cities of India. If the experts are to be believed the real estate companies in India will take anywhere between 3 and 4 years to sell this stock because of the pandemic.
So, what is in store for the real estate companies in India? Will there be a slum of 3 or 4 years? Is there any way the government can help the sector? Let us find out in the next section.
While the picture seems dull and devastating at first glance, the Indian Government is taking serious steps to alleviate it. The Ministry of Steel is working towards the production of 10 million tons of special steel that will not only solve the steel production, but it will also give employment to around 50000 workers. Further, increased production and expanding horizons to decrease the dependence on China. Starting indigenous production of imported goods is also one way to overcome this dependence on China. Another plus point is the availability of surplus funds because of a fall in fuel prices.
So, hopefully, the real estate companies in India don’t have to wait longer for availing the construction essentials and elements. It is also stipulated that once the pandemic subsides, tourism and people-exchange will restart. This will certainly prove to be a plus point for the sector. Once the pandemic subsides, there might be some people looking for retirement locations with fewer populations and fewer cases of COVID-19.
So, as far as the future trends in real estate are concerned, the situation will be salvaged once the pandemic subsides.
Real Estate Companies in India – Expand the Horizons for better days
It is said that every challenge and calamity makes you stronger and better. For the entirety of the real estate companies, this pandemic emerged as a challenge. So, it is important to focus on the wider horizons for overcoming the present challenge.
In the following section, we are going to share some sectors where the real estate companies in India can focus to keep themselves afloat.
- Targeting retiring or retired people for buying homes in sparsely populated areas.
- Building medical institutions and medical centers.
- Building commercial places with top-notch architecture and facilities such as sanitation booths, self-sanitizing surfaces and minimal touch provisions.
- Building co-working spaces or renting current buildings for co-working to a limited number of people such that social distancing is not affected.
- Offering currently vacant places for online classes, tutors, and workers at affordable prices.
- Offering currently vacant places on rent to tourists with a proper following of social distancing and sanitation practices.
Rethinking and remodeling are the only two ways to survive and emerge as a winner. Constant improvisations help businesses to rise-up from financial dump to profit-making entities.
About OMG Properties
Set up in the year 2010, OMG Properties is one of the leading builders in Kerala. They have established projects in different places such as Angamaly, Ottappalam, Vaniyamkulam, Palakkad town and are also expanding their business to other parts of Kerala too.