A one-of a kind transition is in the process of taking place, as all of us tread our path from multiple Lockdown extensions towards Unlock 1.0., amid this crucial changing phase realty also needs a new framework for adoption. Lockdown was imposed to save lives, now it is time we focus on saving our livelihood.
Real Estate offerings are in an advantageous position in terms of an investment product. The property once purchased not only acts as a secure capital asset for future, but also has great potential for price appreciation as the nearby area develops. Commercial realty as compared to residential segment has witnessed a booming growth over the past years due to the co-working culture, high-end retail and entertainment spaces and industry influx. It may take a slight setback due to the popular Work from Culture, however can never go out of demand due to the sheer recreational and organizational attributes attached to it.
How will the New Framework be?
The new framework in realty will be largely dependent on digital presence, ease of virtual interaction and proceedings, secure payment gateways and offers like never before. The interest of homebuyers and investors must be carefully assessed by the developers, before tapping on them. This framework will require the developer to be proactive when it comes to having a strong digital presence. He/ She must look for methods to establish themselves as a person who knows the nitty- gritty of business, and can deliver assurance to the customers without any fail. As buyers who have already invested are tensed about the deliveries, and the fence-sitters are not sure what will be the right project to put their money into.
Challenges in Unlock 1.0
Labour Migration has been a daunting proposition to deal with for various developers who were not able to retain their laborers due to limited cash flow. Also procuring of raw materials was difficult during lockdown when the construction activities were given permission to resume operations with limited labor coupled with adherence to social distancing and hygiene guidelines.
Discussion on price correction is doing rounds and developers have been asked several times to reduce their prices for initiating sales post COVID. The decision- makers have lend their full support with reduced repo rate, extended timelines and CLSS scheme, but asking the realtors to have a price-cut is simply not feasible. Construction industry plays a vital role in maintaining a cash flow in the market, due to its relation with so many allied industries. The costs and regulations borne by the realtors before delivering the projects to homebuyers are multi-faceted and involve huge margins. Reducing prices uprightly cannot be the solution unless they get support from government and banks in terms of loan restructuring, or perhaps a reduction in raw material prices will help in mitigating the price factor as we move forward in the new normal. Realtors can only expect the authorities to help them in clearing these stalled inventories, as growth in realty will have a direct impact on the country's economy and the current market condition.
Ray of Hope for Real Estate
In the midst of people being confined to their homes for such elongated period, and health experts claiming that we must learn and unlearn things to survive with Corona around us. The new- normal has made everyone cautious about their lifestyle choices, question their financial planning and seek for a safer and more advanced environment. All these thought processes are going to be directly translating into the home-buying pattern. Wellness homes, Integrated Townships, RTMI homes, affordable housing units are emerging as some of the most popular choices. Buyers are keenly interested in sustainable and environment friendly living units.
These trends are apparent due to the spike in number of enquiries that have been observed on the digital realty platforms. People with secured incomes are looking to invest in a second home that can yield them rental value, some are looking to switch from their traditional setting to a modern and much more conscious living in terms of cleaning and hygiene standards. Reverse Migration of NRIs and professionals from metros to Tier II and Tier III cities is also helping in reviving demand for real estate projects.
Realty's trajectory of growth
The sector has not seen a great spike of prices since past 7-8 years, but the standstill due to COVID has made the situations tricky. Developers have to alter their business models, revisit their financial planning, be prepared for leading their workers as per the new guidelines, safeguard the health of the workers present at site, and improvise upon labor shortage.
In the end, real estate acts as spokes in the economy wheel by playing crucial role to provide spaces that takes care of the businesses and citizens alike. Various segments of real estate will get back in few months time as the demand has increased multifold. Best part is that real estate has always moved according to the requirements in the market and this dynamic nature provides the sector with necessary cushion in the long run.