COVID-19 has sent everyone in real estate to the drawing board. Marketing teams, sales teams, construction staff, etc, have been busy coming out with new solutions that can help the real estate sector minimize the impact. The talk of the town has been the rental situations, online marketing, investment scenario, revival of various segments, etc.
To start with, we must understand that real estate is a necessity and not a luxury. People need homes, Entrepreneur need commercial establishments and corporates need office spaces. The utility of this sector in the overall GDP of the country can be understood from the fact that the government came out with multiple guidelines for the sector during the lockdown. Repo rates were slashed, which led to decrease in home loan interest rates, and packages were announced to help the real estate sector run smoothly.
Now coming down to the impact, it will not be sane to deny the effect as the pandemic has affected every aspect of life. Real estate is also one of the victims, but it has been among the least-impacted sectors by the ill-effects. What made the sector through the difficult times? The answer lies in the growing use of digital spaces by the people. Realtors relied heavily on the medium and made it a point to attract the attention of customers, who had ample time at their hand sitting at home and surfing. The result was an encouraging number of sales being executed during the lockdown. Virtual tours and lucrative schemes helped to achieve decent numbers. In fact, cost of marketing came down a lot for almost all realtors.
As the country has started moving towards the Unlock phase, further push is required to ensure that the positive message about real estate assets stays firm. If handled with intricate planning, the sector is likely to see a boom in residential as well as commercial real estate. Not only the end-users, realtors have to woo investors also who have burned their fingers by investing in various financial instruments and have witnessed their value crashing down during the lockdown phase. Realisation of the stability of real estate investment has to be hammered in regularly through the judicious use of digital spaces.
The time taken to come back to the prime will depend on segments. Residential will take 6 months, commercial may be back within a year, but the worst sufferer is the retail that might take around 18 months to recover fully. However, even these numbers are speculations as we have seen that China, a place from where Corona originated, is back on its feet in no time. Retail in China has witnessed a good jump as people came out to buy immediately after the restrictions were lifted. India, too, will witness the same enthusiasm as people have been waiting to come out of their homes and go on a buying spree.
Many theories have been propounded that people will become cautious as job losses are looming heavily. However, one must also believe various surveys that have highlighted that people have now realized the importance of having their own home. Then there are people who will go for second or third homes to turn them into an alternative source of income for them. Commercial will also benefit from first-time investors who have noticed how lucrative the asset is in terms of giving returns and turning out to be a fruitful proposition in times of need.
Yes, there might be rental re-considerations, price negotiations, and preference for a particular size of property. All of this would be on a case to case basis and cannot be put as general rule for real estate all over the country. The safety and security of investment and people provided by real estate is making it the sector that is going to be back with a bang before any other industry or segment. Numbers have already started to speak for themselves, enquiries are flooding the offices of realtors, and thus turning the hope into reality.