Impact of resurgent Covid-19 on real estate project launches, sales and site visits

Dr. Niranjan Hiranandani, National President, NAREDCO

The pandemic has brought home the reality that the safest place to be during any such challenged times is one’s own home; and this has translated into traditional renters opting to buy their own homes; ‘work and study from home’ has existing homeowners opting to upgrade to bigger homes while investors are also getting attracted to residential real estate. Given these factors which impact home buying sentiment, there is little impact on demand for housing; and with ‘in situ’ workers being allowed to continue working on projects, construction is also practically at a normal pace. Sales and marketing activities have moved to digital platforms, so again, the inability to personally visit a developer’s office or a project site doesn’t stop the process of home buying. New project launches are happening at a pace that mirrors the impact of the pandemic on the economy, this is an on-going process since 2020, and one sees no direct impact of the second wave.

The impact of the second wave is primarily being felt at projects where there are other issues which the second wave exacerbates. Larger sized real estate development companies tend to be corporates, so smaller companies face challenges which non-corporate business organizations do, and this aspect is mirrored in real estate too. Site visits have largely shifted from ‘personal’ to ‘digital’; there is a shortfall of 10 to 15 per cent because a segment of customers opts to wait for resumption of site visits rather than take the digital option. Other than that, real estate has not been impacted much by the second wave, we were already in ‘work from remote location’ mode and construction with enhanced automation, is proceeding as per schedule with safety and security at project sites.

The vaccination drive is having a positive impact on real estate like other segments of the economy, and impact of the second wave on price points, especially in residential real estate, is not much– there is a reduction in number of ready to move in homes with bookings through September 2020 till end-January 2020 happening in large numbers, so the real estate market does not see much scope for any major change in price points. Yes, real estate developers are working at sweetening deals, so you may find some project where the developer might offer a ‘sweeter price point’; but I do not foresee any major changes in price-points. When it comes to workspaces, there is this curious situation: on one hand, these are still impacted by the ‘work from remote location’ aspect especially in CBD areas; while the very same aspect has pushed up demand for work spaces and co-working spaces in residential areas, where we see a definite trend of the workforce opting to work from a coworking location near their homes. The paradigm of workspaces is evolving in sync with the ‘new normal’, and we will see a few more changes in how this segment emerges from the impact of the pandemic. The vaccination drive is having a positive impact, as we move towards larger numbers of Indians being vaccinated, work spaces and co-working spaces will definitely see a hike in demand.