The rapidly spreading novel coronavirus has immobilised industries, markets and economies worldwide. Globally, no business or sector has been able to insulate itself from the outbreak’s effects or withstand the onslaught that has caused havoc on macro-economic and social factors.
In India, too, the tremors of the impact have intensified. Although the central and state governments have taken steps to ensure containment and prevention, the near future looks unpredictable, with the count rising every day.
With most companies and organizations proceeding to implement policies of no face to face meetings’ and no visitors’, the real estate market has been affected.
Sales and marketing efforts have been paused and deal dates have been pushed to the future.
Travel and visa restrictions have further lead to delay in projects being built through foreign collaboration. Construction activities have also reduced due to announced precautionary measures.
The global economic slowdown, which has already impacted scores of markets and businesses in the country, is now resulting in further fall in property prices.
Generally viewed as a need’ or investment’, the demand for residential is going to get squeezed with people trying to conserve cash at their end.
An added factor has been the possible salary cuts employees might have to face if the situation deteriorates. As on date, hiring has been stopped in the sector.
Given these conditions at the employees’ end, their capacity to send money on houses will be significantly impacted, which is where residential will see a further challenge.
Investors and buyers will also be unwilling to purchase real estate due to the prevailing gloomy market sentiments. Capital flows and liquidity will potentially look at going down in light of the current circumstances.
Commercial real estate
Tourism has already been hit with major countries in Europe, USA and China following a close-door’ policy and imposing tight restrictions on international travel.
Tourism and travel advisories will also lead to the hospitality sector facing losses, with many travellers deciding to cancel their bookings.
The commercial real estate which till now, has been the jewel in the crown’ of real estate is bound to face repercussions too due to these measures. Corporate occupiers would postpone taking up spaces till the time the current scenario becomes clear and is under control.
Given the fact that the pandemic has been brought into the country by international travellers to urban areas is a cause of worry. The entire support system of an urban area exists alongside it, especially with our density of population being one of the highest in the world; we are looking at a potentially huge problem.
It is important to strategically rethink spacing out our urban planning approach making sure that we have a well-articulated master plan which connects proper infrastructure. This kind of method will ensure that we can be selective about quarantining spaces in case the need to do so arises in future.
(The author of the article is Managing Director of Royal Institution of Chartered Surveyors, South Asia. All views expressed are personal.)
Also Read | Coronavirus in India: Candles, diyas lit on PM Modi’s call, no immediate report of power tripping
Also Read | Coronavirus in India: Death toll crosses 100-mark, total Covid-19 cases top 4,000
Also Watch | Over 3,500 tested positive for coronavirus in India