Amidst Corona virus Epidemic: Know the Impact on Financial Investment in India

The whole world is facing the COVID-19 epidemic. And, while its outbreak in China has only ended a few months, it has already affected 74,61,261 people worldwide, recording 4,19,070 deaths so far. The rapid spread of the virus has prompted people to keep their money in liquid form. Thus, instead of investing in the market, more people are selling their property. In just a few weeks, the epidemic has shaken investor confidence. Thus, the SENSEX is showing an unprecedented slowdown. In addition, the crude oil war between Saudi Arabia and Russia has led to instability in the equity and debt markets.

It is estimated that very soon, corona virus can infect two-thirds of the world's population. This scenario is going to have a negative impact on the Indian economy as well as global economic growth. Let us examine the effect of COVID-19 on most investment routes in India.

1) Sensex is below its 10-year average

The stock market is in turmoil as broader market valuations have slipped below the 10-year average. This is the worst time to sell shares as the Sensex has turned negative. The value of shares in the market has fallen by 44 percent, yet due to uncertainty people are eager to sell their shares. While some financial experts suggest that this time may be optimal for long-term investors, hype is that the market may take several years to recover. In addition, there may be a further decline of 8 to 10% over the next few years. Therefore, there is no certainty for the recovery of higher returns in the future.

As the stock market is witnessing heavy selling, this is the worst time for short-term investment. Right now, you should stay away from small and mid-cap stocks until the volatility settles.

2) Tourism and aviation are showing a sluggish business

The rapid proliferation of corona viruses has severely affected the aviation sector. Most international flights have been canceled, and even domestic carriers are showing sluggish business. Tourism is an important opportunity for income generation in India, but unfortunately, there is a panic in the tourism sector as thousands of tourists are barred from visiting India.

As a result, the hotel and restaurant industry is also showing a petty business. Also, all places of entertainment have been closed because avoiding public meetings is a preventive measure against COVID-19.

3) Gold is not so good for investment

Currently, gold prices are touching an all-time high due to the outbreak of COVID-19. Gold has been seen as a place of investment, with equity markets taking a step back from risk. Although gold is expected to benefit from the low yield scenario, it cannot be considered an interest-bearing asset. Eventually, gold prices will definitely decline after a few months.

If you are already investing in sovereign gold bonds, this is an opportune time to sell them and profit from gold price movements. But now investing in these bonds will not be beneficial.

4) Real estate shines amidst all the uncertainties

As the novel corona virus continues to spread throughout the world, the residential real estate market will feel the effects of quarantine. According to an estimate, only 15% of households in India provide at least one room per person, which is mandatory for self-quarantine. Therefore, in the next few months, there may be high demand for fully furnished homes on rent. And, property owners can take advantage of high rental demand.

As the government focused on the need for social isolation, the sale, purchase and construction of real estate will continue for the next few months. According to a survey, between the COVID-19 hit markets, there has been no change in the interests of the buyer and seller. Therefore, there will be almost no impact on the prices of assets. Although the commercial real estate market may not attract new rental interests over the next few months, there will be no drop or rise in their prices.

While each avenue of investment is showing a degree of uncertainty, real estate is the safest option at hand. Investing in stock and tourism businesses cannot be rationalized at present as these sectors are showing no signs of recovery soon. While gold prices have gone up, there is a strong possibility of a fall in prices after a few months. Therefore, if you are thinking about investing your money, then real estate is the best option as it is possible to drop its prices due to any market fluctuations or political, economic and social scenarios.

Plan to fight corona virus? Pay attention for house you live in

The rapid introduction of corona viruses has endangered the entire human community throughout the world. Although corona virus was first developed during 1937, a recent version of corona virus that originated from Wuhan, China is responsible for an acute respiratory syndrome that is highly fatal. Among humans, corona virus infection occurs mostly during the winter and early springs as the virus finds a precise environment to live and thrive.

The World Health Organization and many research institutes around the world are looking for an action plan to control the spread of the deadly virus. Currently, preventive measures basically focus on avoiding human-to-human transmission. In addition, there is a need to focus on the environment - water, soil, air and man-made surfaces.

Dark and dirty environments serve as a repository of pathogens. If people live in a contaminated environment, they can become infected with the virus. Therefore, to deal with virus outbreaks, it is important to live in a green building. Some of the reasons supporting this idea are:

1) Airlessness and vapor barrier in building walls

Viruses mostly live as living cells in an organism's body. But when they are not inside a host, it is present in the environment as small particles. There is scientific evidence that most pathogens live in dark, cold, dirty environments. Generally, viruses prefer low temperatures, about 4 ℃, and low humidity. Therefore, to prevent them, it is better to stay in the green building. Aeration and vapor barrier in building walls retain moisture and moisture from outside.

2) Low solar heat gain coefficient

Green buildings include a low solar heat gain coefficient that is the amount of solar radiation that enters through the glass and is released as heat inside a building. A low solar heat coefficient ensures that the environment has a moderate temperature that eliminates the growth of pathogens.

3) Open, natural environment

Most infectious diseases, including severe infectious respiratory syndrome that are caused by corona virus, are due to human-to-human contamination. Thus, it is better to live in less crowded areas. Green buildings are usually constructed in open, large spaces, probably in a suburban location, which is very good for the prevention of the disease.

4) Antimicrobial floors and walls

Green buildings have anti-microbial floors and walls that can inhibit microorganisms. There are no seams, welds, or grout lines on these surfaces where fungi and bacteria can potentially irritate and grow. Thus, green buildings promote clean and hygienic conditions.

There are many real estate developers in India who are developing green buildings. By staying in these houses, you can avoid infectious diseases to some extent. These include airtight walls and floors that can improve air quality by eliminating the entry and growth of microbes. And, there are many other benefits of living in green buildings including energy conservation and rainwater harvesting. Also, the building materials in these buildings never harm our environment or harm people in it.

How Real Estate Affected by COVID-19

COVID-19 affects real estate in the market 

The corona virus scare is infecting people worldwide and affecting the real estate market, as it is spreading rapidly at lightning speed. According to the economist the rate of the economy will decrease as most people have reduced or reduced their income to overcome the current global disease.

Due to the global disease affecting the world, many people are trying to keep away the social disturbances and save their belongings and savings which can come to the rescue in the event of being affected. As per the security measures, the government has implemented mandatory lock-downs, which has led to a slowdown in the economy and a huge gap in the exchange of funds.

Impact on Real Estate: The current situation will affect the economy as it will have serious long-term consequences that can last for months, years or decades and have targeted the market and economy. Currently the real estate is still stalled due to the lockdown as sales and marketing efforts have been halted, with no interaction between buyer and seller. Both customers are thinking twice before trying to exchange money. Even if a buyer does not decide to buy the property or a seller is not selling his property or the investor decides not to invest the money of the property thinking what will happen next in the market, it will hurt the economy. And real estate will decline. As people fear what will happen next due to global illness, there will be less demand from buyers, this will freeze finances and this will have a huge impact in the real estate industry. Construction of projects has been delayed due to travel restrictions. Precautionary measures have also led to a decrease in construction activities.

Real estate mainly relies on project listings, as listings bring in sellers and buyers, it will make money, as long as listings occur, there will be buyers who can put themselves at risk for investment. Since no new inventory is being created on new projects due to the lockdown, there is less advertising on the assets being exposed in the market. Due to the impact of Corona, the global economy has declined and has already impacted the market and businesses in the country which have affected the decline in property prices. The demand for housing is going to be affected as people are trying to save their cash due to salary cuts and may face it if the situation deteriorates, as hiring in the area has been completely halted.

Predictions

According to the survey published by Economic Times, India Bar, on 2 April 2020, there is a huge impact on Indian real estate as it stands still due to the nationwide lock down. Housing sales have been reduced by 25 to 35% and office locations by 13 to 30%. In 2019 residential sales in the top 7 cities (Delhi-NCR, Mumbai Metropolitan Region (MMR), Kolkata, Chennai, Bengaluru, Pune and Hyderabad) are about 2.61 lakh units, which can fall from 1.70 lakh to 1.96 lakh units. Similarly, new launches can see a 25 to 30% drop according to ANAROCK Property Consultant. About 4.66 lakh units in the top 7 cities were earlier scheduled for completion in 2020, there may be a risk of delay. The nationwide lockdown has completely halted construction activity, project delays and may last several months until the epidemic arrives and this will cause demand to fall in supply.

Talking about non-residential areas, corporate businessmen are delaying their leasing decisions as many multinationals and businesses are testing the Work from Home option, which, if proven successful, will allow it to be leased in the future.

One positive thing to note is that this is the best time for investors who want to invest in real estate during lock down as it will be a passive income with low investment and high returns, attractive prices for them, Affects sellers financially. Sell ​​your property, good financing options as home loan rates are reduced and use your time in search of better properties.

To conclude how long the corona virus will last, no one knows, if it goes away in two months things may not fully recover or return to normalcy. The spread of the corona virus depends on the weather and how long it lasts, the flu season and it does not like the warm climate that disappears. As it has become a major epidemic and is spreading soon. In the end how long the corona virus will affect the market or economy depends on us and how we are ready to fight against it.

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.