A year has elapsed since the first nationwide lockdown swept across the nation with the eruption of a diabolical pandemic. The anniversary marks a poignant tale about the real estate sector that was brought to the knees when the lockdown came into force, but afterwards scripted a promising comeback, that was writ large with resilience, patience, and determination.
In sync with this quote, “When the going gets tough, the tough get going”, the real estate sector underwent the immense pain brought about by supply chain disruptions, liquidity crisis and labour shortages during the height of the pandemic and responded to these challenges in a proactive manner. Pulses need to be drawn from the unbelievable feat displayed by the real estate sector at a time when the economy was going downhill, the speedy transformation that the sector went through and the never-say-die attitude it displayed when the odds are against it.
The rejuvenation of the real estate sector in Q3 2020, after a muted performance in Q1 & Q2, was supported by game-changing policy measures & stimulus by the government and backed by an emotional and aspiration-driven demand for homeownership. Low-interest rates by banks, innovative payment schemes and offers by developers and reduction of stamp duty by the government augured well for the sector.
Though the fiscal stimulus and policy measures by the government provided the much-needed impetus to the real estate sector, it was the renewed consumer demand that helped the sector to clear out piling inventory and bring liquidity into the hands of the developers. Affordable and mid-segment home sales surged as homebuyers ventured out to online real estate portals to buy spacious homes, cashing in on the offers doled out by developers, steady property prices and low-interest rates. Not to mention luxury home sales that have also picked up pace with NRIs and HNIs milking this once-in-a-lifetime opportunity to own a large home.
However, there were some important lessons that helped the real estate sector to come out of the pandemic blues.
Credibility is key to survival: In the highly volatile pandemic scenario, it is the big real estate brands that have stood the onslaught. Why? Because they wear credibility on their shoulders and deliver quality projects on time. Homebuyers looking to upgrade their homes during the pandemic chose top brands since they were able to offer building models, amenities and preferences that suited the demands of the consumers; and they flourished post lockdown selling thousands of homes.
Technology is a game-changer: Technology helped the real estate sector to enable business continuity during the pandemic. Developers saw how Virtual Reality, AI, AR and video communication tools helped them to ride out the crisis and generate stupendous sales. Induction of tech-enabled shorter home-booking cycles improved operating efficiency by obliterating paperwork, cutting down costs & travel time and led to quicker cash flow.
Better financial planning & cashflow management needed: Property developers who have managed their cashflows and debts well during the peak of the pandemic and are continuing to do so at an operational level have fared better, remained resilient and managed to not slide into debt. Identifying crisis signals, increasing budget monitoring, and coordinating the procurement, cost, sales and human resource budgets to avoid disproportionate distribution of capital and maintain adequate liquidity will help overcome any crisis in future.
Focus on wellness during project design: The pandemic has shifted our perception of homes. Since homes have become places of work & play, there is an increased emphasis on the need for amenities that include wellness quotients. Well-spaced outdoor areas such as rooftop decks and courtyards, spacious rooms with an abundance of light and air, designated workspaces that enhance privacy and social interaction-such are facets developers should focus on and think while preparing design blueprints.
The pandemic has changed a lot. It has changed how people perceive everyday life, and it has changed real estate business big time. After a year of lockdown, the pandemic has taught the real estate industry to innovate, adapt, amend and align businesses to survive the new normal and rebound stronger.
