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.
