How Will The COVID-19 Second Wave Impact the Real Estate Sector?

India has been hit by a huge second coronavirus wave. The economy has been impacted surely skeptically by the coronavirus wave. The real estate developer has manifested an eagerness to learn from the events that unfolded and impacted in 2020 lockdown.

Maharashtra, Delhi, Rajasthan are some of the major regions that are highly affected due to the Coronavirus outspread. The second lockdown has caused hindrance the real estate, where laborers are migrating outward. Let us have a look into the impact the real estate industry has gone through due to the situation of COVID.

Current Scenario of Real Estate in India

The stringent restrictions and relentless rise of lethal COVID-19 have majorly affected the outlook of real estate especially that of commercial properties. The recovery witnessed in the past six months might get hampered in the real estate as reported in the analysis by CARE Ratings.

Upscale projects in urban areas have been frozen and reverse migration of under construction laborers is affecting real estate and significant adverse changes are anticipated for the prices.

Nowadays, Real Estate Companies are well aware and prepared for the situation thanks to improvised strategies and working in real estate. The recreation & retail activity has witnessed a downfall by 25 percent observed as of April 7, 2021, as compared to February 24, 2021, as per Google mobility data. Nevertheless, strict restrictions on Hotels, Shopping Complexes, and commercial places are confronting challenges and a drop in profit levels. in addition, there is no report when restrictions to visit public places will be uplifted.

Lessons Learned from Lockdown 1.0 and its Implementation

The outbreak of the COVID-19 is worse now but situations in real estate are not as skeptical as compared to Lockdown 1.0. the stringent lockdown restrictions are not imposed which were practiced earlier as only localized lockdown with the exemption for different activities is imposed by Government.

In 2020, a complete 21 days lockdown was announced that caused a major hindrance in work. As stated by the Construction Workers Federation of India that during 70% of laborers migrated in 2020 as compared to the previous scenario migrants aren’t moving in such a large number.

Learning from previous lockdown CREDAI (Confederation of Real Estate Developers Association of India) ensured to provide construction laborers proper accommodation and suffice their basic amenities such as medical assistance and groceries with better hygiene and safety.

The CREDAI assurance can be experienced with practices of COVID-19 regular on-site tests and medical isolation privileges provided. The assurance of on-spot medical attention and enhanced hygiene is a relief for laborers certainly.

The carelessness during the current situation is what makes it worse so it is better to practice safe distancing, proper sanitization along getting a jab of vaccine to prevent things from falling apart.

Expecting Quick Normalization of Situation

Government support and awareness of the current situation is likely to show a positive impact on the real estate sector certainly. The exemptions and localized lockdown by the government are making is helpful to get back to new normal soon. The awareness of Lockdown has highlighted the importance of housing assisting the sales of Residential properties. Online webinars and virtual home tours are some helpful tactics that are proven to be optimal for Real estate.

Given the choice of easier home loan availability, property affordability, and added benefits, customers are attracted to properties majorly.

In addition, according to RBI’s new update on the cut of the repo rate by 25% is making home loans and residential properties an ideal deal for customers. Seeing the effective practices of real estate companies employment opportunities are provided as well which is surely a positive indication amid crisis.

The alarming spike of coronavirus cases construction activities in urban cities like Mumbai, Pune, Delhi, and others must be taken into consideration. desire to own your dream home and properties may drop amid trying times making customers hesitant to invest not knowing what’s next to come.
It is equally important to practice rightful practices such as virtual tours, minimal physical site visits, restrict unnecessary movement and proper sanitization to get back to the new normal. It is the need of the hour to be highly aware of the present scenario and take necessary precautions.

In the end, it can be said that real estate is being impacted majorly especially in a major drop in retail and recreation activity. However, with the lessons learned from the previous lockdown, and implementation of better strategies is being practiced to minimize the impact. The desire to get your own house among home buyers is prevalent and current interest rates are making home deals even more appealing but due to unprecedented situations customers may become hesitant to invest.

We expect situations to get back to normal quickly and once it happens the present curbs shall be put to an end. Stay safe and stay positive for the New Normal.

 

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What are Post COVID Impact on Real Estate?

 

The Unprecedented Outbreak of Deadly Corona Virus has shaken the world thoroughly. The COVID impact is quite evident in all these sectors however it has lead major impacts on Real Estate in India. The second wave of Corona has spiked thirteen fold increase in cases with an active number of 3,79,308 cases.

In the Year 2020, everyone Learned New Normal of Work from Home however there are different changes that took place in real estate. Due to Lethal Resurgence of COVID-19 real estate may get off track Despite the New Normal as reported the Realty Experts. In India corona cases has surpassed United States and Brazil in terms of active cases with 12.8 million cases. The Corona Spike has affected Big Cities like Maharashtra, Delhi, Rajasthan, Gujarat and Orissa extremely. Strict Restrictions have been imposed in different side of nation with Night Curfews, Weekend Lockdown, and Part-Lockdown.

Observing the Current Condition, Home Buyers are likely to get affected due to COVID-19 and Demand for Real Estate property may fall as well. However, Different Practices are getting into force by Banking Institutions for instance Apex Bank on April 7, 2021 chose to sustain Policy rates with Status Quo. In addition, SBI has decided to Raise Home Loan Interest Rate by 0.25% which is a clear indication of Banks backing off from low interest rate scheme imposed in the previous Lockdown in 2020.

Major Impacts:

1- Increase in Affordability of Properties

A Major Impact is to be anticipated on the behavior of Home Buyers as Home loan Interest rates are low but with higher exemption. Residential Sector may witness the higher sales considering the Sales number during January to March 2021. Home buyers can attain Home Loans at 6.65% annual Interest as RBI is going with Continue with the same Repo Rate that is 4%. For the Home Buyers it turns out to be the happy news as contrast to January 2020 where a higher rate of 8% was witnessed. An affordable housing will be a favorable outcome to occur proffering an opportunity to acquire Properties with affordability.

2- Downfall of Commercial & Retail Real Estate in India

Pandemic effects can be seen as a serious concern for the Commercial & Retail Real Estate in India as work from home concept has dropped down the leasing deals of the Office spaces. an amount of 35 lakh sqft in Jan-Mar 2021 has been declined that was 70 lakh sq ft as correspondence period in the Year 2020. Therefore, leasing transactions are likely to witness considerable downfall in the Retail Real Estate.

The Demand of the Flexible Workspaces has surged and also turned out to be a hit. In accordance to experts Flexible workspaces shall increase by 38 mnft in next one Year. The lockdown extension has made big downfall in Commercial & Retail Real Estate if it continues it may lead to serious concern for the industry.

What’s Good amid Pandemic?

The Higher spike in the COVID cases and restrictions is an adversary for everyone. Nevertheless, if we see what’s good in such situations there are considerable points that may arise a ray of hope among the realtors.

Restored Normalcy Due to Vaccine

The Year of 2020 introduced new lessons to everyone where we got introduced to new normal but also faced complications due to the lethal virus however in 2021 AstraZeneca’s Coronavirus Vaccine has given a sigh of relief. Economy is expected to witness momentum in 2021 & higher optimism due to introduction of Vaccine. A significant improvement in the economy status will be evident that’ll surely lead to higher growth.

Considering the current reports, Residential Housings is again getting stronger in sales and impact of coronavirus anticipated to be minimal in contrast to 2020. This is a clear indication of the full-fledged recovery of the Real Estate & reformation of multiple Efficient Strategies.

Rise of Remote working & Digitalization

The rise of remote working and digitalization is on peak all thanks to Covid Impact. the unprecedented situation made people smarter & efficient to find new way of working. A prolonged lockdown experiment has helped people not only to break the corona chain but to also exercise daily jobs with the help of digitalization. Multiple Revenue Targets have been met in commerce with the active access through digital Portals. in addition, rise of digitalization has taken down all the limitations related to work as now it can be completed from the comfort of home as well. accordingly, increase in efficiency and productivity of the employees without any wastage of time is a win-win situation.

Hence, we can say that technology has come out as the saving grace and key to cope up with Businesses.

In conclusion, Post COVID Impact in 2020 had extremely impacted the Real Estate. Better Days are expected in 2021 as amid growing corona cases Increasing Demand for Residential Properties is a evidence of it for Real Estate sector. Here’s an opportunity as during this time, Realty Experts in different sectors can readdress strategies for coping up with Pandemic Damage. However, the widespread of Corona cases has enlightened the need of Modern approaches to Business with transformational methods.

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NRI Investment May Rise in Indian Realty

The COVID-19 Pandemic has affected many aspects of people’s lives. It has also brought to light the importance of having one’s own home or property to rely on, in rainy days. NRIs across the world are viewing Indian Realty as a potential Market for rewarding investment returns as well as for attaining a sense of security.  Even though in the meantime, NRIs may not be in the right frame of mind to invest in property investment right away, but as the situation gets better, the NRI investment will definitely soar. The reason being the realization of the importance of owning an asset which can be used either for the purpose of accommodation and is profitable in the long run.

There has been a major shift in the priorities of people, having a home as a strong asset that can be relied on in unpredictable times has become very clear. Additionally, investors have also had time to reevaluate their investment strategies, bringing Real Estate Sector on the top. Real Estate Sector has more potential of witnessing accelerated growth as soon as the current situation gradually gets better. Compared to other investments, Real Estate investments are more secure, because even if the value drops, property can be utilized as a residence or can be rented out.

There are many reasons inclining towards the possibility of increased NRI investment in Indian Realty Sector. It is predicted that Real Estate Investment in India is the best investment for NRI. Property investment is ideal for many reasons, property is not just an asset but also a long-term investment that can be made for high returns. In the meantime, considering the situation, people living across the world have been faced with a vulnerable situation. It has highlighted the significance of having a home in a familiar country and how beneficial it can be. NRIs across the world seek a sense of relief from an investment in Indian Real Estate. In case they wish to settle in India in the future, it provides a sense of comfort, having a home to count on, in a dependable country where their relatives or family already resides.

A major reason behind NRIs wanting to curve back to India is the high living expenses that they have to incur in other countries. This has a massive impact, especially in times of calamities, when there is uncertainty in terms of having a reliable source of high income. Many students studying abroad or those who were willing to move abroad this year have also made their way back to India to live with their close ones. This has also made the significance and contentment that comes with being in a country that is amicable.

Property investment is comparatively more feasible for people due to the difference in the currency and its value. For an NRI investment in Real Estate in India is far more affordable than in any other country, considering more than one aspect. Not only does it allow the NRIs to have an edge in terms of monetary strength but it also makes Indian Real Estate seem very feasible.

One of the major reasons NRI investments in India are presumed is because of the depreciation of value of Indian Rupee. This poses an ideal opportunity for NRIs with higher purchasing power to make the best property investment to luxuriate in the future.
The monetary benefits being provided by the government further edify this opportunity. The low interest rates are very appealing to potential home buyers, specially NRIs with high purchasing power.

Another major reason behind Indian Real Estate in the meantime being advantageous for NRIs is the various schemes that have been introduced by Real Estate Developers to entice the investors as well as home buyers. This poses an even more promising opportunity for NRIs.

Top Real Estate Developer in Punjab SBP Group, offers great investment opportunities in residential property via townships and residential apartments have promising times to look forward to. SBP Group has always been NRIs choice considering it does not only match but also surpass worldly standards. SBP Group’s project like City of Dreams & Gateway of Dreams, curated with a futuristic approach, with worldly amenities are an ideal investment opportunity for the everyone, especially the NRIs who are used to living in top-notch localities, with a high standard of lifestyle.

Considering the overall scenario of Indian Real Estate, it is very adamant that the sector has made massive advancements over the years. Be it in terms of Infrastructure or connectivity, the real estate projects are built with a lot of thought and distinction.

In conclusion, Real Estate will be witnessing an upsurge in investment and especially investment from NRIs living in various parts of the world.

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