Impact on Indian Housing Market due to COVID-19

Corona virus proliferation has further delayed a recovery that may be due to measures launched to revive various government demands, however, it does not appear that prices will fall immediately. Niranjan Hiranandani, national president, NAREDCO, says that "reviving Indian realty is the second largest employment generator, not only from the point of view of GDP growth, but also for job creation as the multiplier effect of more than 250 affiliated industries in the region is.

Recently, the Center announced more tax breaks and lower interest rates on home loans to make purchases more attractive, besides setting up Rs 25,000 crore stress fund for speculation.

He called for a slowdown in the residential segment, which has already stalled housing sales, project launches and price increases in India's residential realty sector, which is under pressure due to mega regulatory changes due to Real Estate Regulatory Authority (RERA), Goods and Services Tax (GST), Demonetization and Benami Property Law.

According to rating agency ICRA, the epidemic, if not soon included, will not only significantly affect the economy, but will adversely affect the cash flow and project delivery capabilities of developers.

"Although in the case of a prolonged outbreak, the impact on overall economic activity is likely to be deeper and more sustained, resulting in a more significant impact on developer cash flow and project execution capabilities, leading to a wider credit negative impact." ICRA said in a recent note that the three-month deferment announced by the RBI on loan on March 28 would provide some comfort to the builders.

“The injected liquidity of Rs 3.74 lakh crore (by RBI) with a three-month moratorium on all loans by financial institutions will ease short-term liquidity concerns and help developers as well as homebuyers. It is a great relief for developers and buyers to help ease the challenges they currently face,” says Ramesh Nair, CEO and Country Head of JLL India.

Anticipating the delay in completion of the project and supporting the builder community, the Real Estate Regulatory Authority in Maharashtra has announced a 3-month extension in the completion deadline of the project.

Recall here that real estate developers in Mumbai, the state capital and India's financial nerve center, have the largest selling stock in the top nine markets.

“Due to the 21-day lockdown outbreak of COVID-19, both manufacturing and sales activity has come to a complete halt in the entire real estate sector. At many sites, construction workers have also moved back to their hometowns. Even after the lockdown, the activity will only recommend slowly, which will cause project delays anywhere between at least 4 to 6 months,” said Sharad Mittal, CEO and head, Motilal Oswal Real Estate Funds. Welcoming the announcement of Maharera, Mittal said that although it cannot fully compensate the sector with actual project delays that are likely to be direct, 'it is certainly a decision in the right direction, to support real estate developers and the region. Overall in this global crisis.

STAY HOME, STAY SAFE, STAY ALIVE

Corona virus outbreak 2020 - affects real estate growth in India?

Today, at the endemic of this severe corona virus, experts are busy calculating abnormal human loss worldwide. People are suffering or out of home due to the outbreak of this virus. In the meantime, the effect of the unexpected opposition to this deadly virus spreading on the global economy has been agreed.

Considering COVID - 19, the estimated loss to GDP in the world so far has been assumed to be 0.2 percent. For the grace of God, the effect is by no means limited in India. But in this scenario, it is clear that the Indian economy, which has already seen a 4.5% lower growth in the July - September quarter, will probably not remain uninhabitable due to the worldwide economic slowdown. And, the realty industry of the Indian residential market is telling a different story altogether.

COVID - 19 affects the property market in India

If the data collected from SuGanta.com is analyzed together, it is clearly visible the fall of 9 important residential markets of India by 30 percent during the time span of October to December last year. It is deteriorating for the fifth consecutive time of Q3 financial year 2019.

The trend is also the same for the launch of new projects. Since the third quarter of the last financial year, the task of starting new projects has been facing a continuous decline in the mega markets. This caused an annual decline of 44% in the October to December time period.

Despite all the government-issued schemes, including the lowest interest rate on home loans and the maximum tax exemption on purchasing any residential property in India for the first time in the history of real estate, all efforts failed to revive property demands among homebuyers are in India. He still chose to remain unaffected by all the tricks played by the stakeholders to force him to go out of his fence. For example, the government took an action to limit GST to 1% for affordable flats, which also went into the vein.

Usually, the craze of buying and selling property in India increases during the festivals of October to December, which did not happen even in 2019. And now in early 2020, there has been an outbreak of the corona virus. And, it has also probably brought the worst times in the residential property market in India. 1705732 Corona positive cases reported globally as of April 10, 2020. And, it is only growing and causing more fear around the world.

The rate of property visits has fallen surprisingly

Well, impressed by the government's plans, given how interested some consumers were in searching for property on the Internet, the Corona virus outbreak just seized them again from doing any such thing. To date, on April 10, 2020, India has reported 7600 corona positive cases. The activation of social media and news channels has succeeded in making people truly aware of COVID - 19 and everyone tries 'Stay Home Stay Safe'. People are really creating social distance by listening to the words of PM Modi. Currently, India is on a 21-day long social lockout to stop the spread of pollution. So, in such a scenario, nobody is dreaming for a site coming to buy a property in India.

Plans for project delays !!

Indian real estate is largely dependent on China, which is the source for COVID - 19 outbreaks. India needs support in matters of sourcing home furnishing essentials, construction materials, plastic to steel to electronic materials and construction equipment from China. Now, India needs to look for alternative sources as China is busy controlling the epidemic of viruses. It will shoot project delays to make sure.

COVID-19 Impact: Extends the full timeframe of MahaRERA projects by 3 months

Mumbai: Maharashtra Real Estate Regulatory Authority (MahaRERA) has extended the validity of registration of projects for which completion date, revised completion date and extended completion date is expiring on or after March 15, 2020.

With this, realty developers will get a three-month extension to complete their projects. Developers are asking for time to complete the project and the exemption from penalty fees can be extended for up to one year.

The authority has extended the date after considering the government declared Covid-19 pandemic, lockdown, its impact on material procurement and construction stagnation.

It has also extended the deadline for all statutory compliance as per the Real Estate (Regulation and Development) Act, 2016 which were in force from March, April and May to June 30, 2020.

Since mid-March, the Maharashtra government has announced a controlled lockdown as a precaution in a way that a partial workforce has been able to participate in work and construction sites in the state.

From 24 March, a complete lockdown was declared for 21 days across the country, allowing only the operation of essential services. In view of these partial lockdowns and recently completed lockdowns, construction work has been affected in MahaRERA registered projects.

“Due to the aforesaid lockdown, the supply chain to obtain construction material was disrupted and the labor force moved back to their home states. Due to these circumstances, real estate projects across Maharashtra will take some time to resume work,” the authority said in a statement.

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Haryana RERA calls for residents to create pool in fund to end project

In its first order, the Real Estate Regulatory Authority (RERA) of Panchkula Bench, Haryana, raised funds for a group of residents to complete the project and complete the remaining construction work and relocate to their dream home. Have said.

This is a major relief for home buyers, who were expecting the completion of their flat by 2011, but could not get it because the builder failed to meet the deadline specified to Project Within. According to them, they are ready to pay 15-20% extra, but at least they will get their flats.

The Panchkula Bench of Haryana RERA has suggested them to form an association and be ready to pay extra money if needed. More than 100 residents of Piyush Heights Society of Faridabad have agreed to pool Rs 8 crore to complete the project.

The Society has 16 residential towers and the builder gave possession for only 14 towers. The remaining 2-towers were left unfinished and the buyer had to relocate to RERA as the builder could not give possession on time.

By order of RERA, the builder of Piyush Heights failed to appear in the court hearing despite public notice and in the 6th hearing, a builder spokesperson asked for he postponement. RERA adjourned the respondents. Some of the unsold flats will be sold by the district authority to recover costs.   

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