The real estate sector in its wildest dreams had never pictured a surgical strike by an invisible spectre on its bastion. In a matter of weeks, the landscape of the housing market dramatically changed as the nationwide lockdown brought real estate activities to a standstill.
Looking at the fluidity of the virus, the real estate sector underwent a massive operation overhaul and adopted a wide range of technological solutions to enhance resilience, maintain stability and enable business continuity. This acted as a game-changing catalyst as real estate developers across the country registered healthy property transactions on online real estate platforms.
However, the battle is far from over. The nationwide lockdown has shaken the foundations of the real estate sector and the road to recovery is still out of sight. Fault lines have widened as housing sales tanked to 52% in the first half of 2020 and new launches declined by a whopping 65% in eight cities including Delhi NCR, MMR, Bengaluru, Chennai and Hyderabad. The government stepped in with financial stimulus, tax cuts and incentives, in a bid to clear off existing inventory, and provide some relief to the sector. The move paid off as most real estate developers registered good Q3 sales figures with affordable housing taking the lion’s share in sales.
But the cloud of uncertainty is still hovering over the real estate sector about whether the housing sales will reach pre-Covid levels. The news of a potential vaccine hasn’t concretized yet, with various medicinal companies putting out bids about how effective their vaccine is. The real estate sector is waiting impatiently for a green signal from the government about inoculating the masses, which can help the sector resurrect its fortunes and put to task its strategic post-covid blueprints about housing the masses.
Big Cities can stage a turnaround
While widespread vaccination is still a long way off, the news alone can be music to the ears of the real estate sector. The positive news can erase uncertainty in the minds of buyers, unleash a swathe of confidence and empower them to be decisive.
What’s more, once the vaccine is approved, big cities like MMR, Delhi NCR, Bangalore, Chennai, Hyderabad will see a huge spike in housing sales. It is a fact that working professionals, no longer tethered to offices have retreated into the suburbs and less densely populated areas where affordable homes with larger rooms are in plenty. However, once the vaccine is out and schools & colleges reopen and big companies usher employees back to offices, the housing market in cities will boom.
People will rush to rent or buy homes in the cities’ most happening places as life will tread back to normalcy again. The rental market will pick up first followed by the primary residential market. However, we shouldn’t expect an immediate change. There is still a lot of runway ahead and the good times will come at its own pace.
Suburbs will prosper as buyers won’t worry much about commute
The uncertainty of the pandemic has led homebuyers to flee cities and buy bigger homes at affordable rates in suburbs where fresh air and green surroundings are in plenty. The pleasure of living with lesser restrictions, having plenty of space to unwind and staying safe and healthy without worrying about pollution and the drudgery of city life, will compel homebuyers to take to the suburbs.
This trend will continue even if the vaccine is announced. The virus has increased the necessity of buying a home as a secure lifetime asset. People getting used to working from home and living comfortably away from the city won’t worry much about the commute to the office even if companies decide upon a combination of work from home and at the office. So real estate developers can see strong demand for housing in the suburbs in the coming months.
Foreign buyers to invest more in Indian real estate
Indian real estate has become a hotspot for NRIs in the post-pandemic months, with realtors registering healthy sales in mid and luxury home categories. However, foreign buyers have shied away from investing on Indian shores, owing to the lurking uncertainty of the pandemic, and the lack of confidence in India’s real estate market as of now.
The announcement of the vaccine can be a positive catalyst for foreign buyers to invest in India’s realty sector with more alacrity. In the post-vaccine world, foreign investors with money sitting on the side-lines will likely return to the market, collab with branded real estate developers and capitalize on the growing potential of the real estate market.
All said the real estate sector will get back to its heydays once it gets a shot in the arm with the announcement of the vaccine. Cities will be appealing again as businesses revive, offices reopen, and the economy stabilizes.
