The covid 19 outbreak has turned the entire world on its head. The impact has been such that everyone has to adopt a new way of living. It has re-defined the new ‘normal’. Apart from that, every industry has faced devastating loss and is trying to stay afloat. The real industry is one such which has faced the major impact, writes Swapna More, Co-Founder KAGAAY and State Chairperson (CIMSME).
With businesses going shut and people losing jobs, it directly impacted the real estate sector. The hit to the economy had a far lasting impact on the industry. The projected loss to the Indian real estate sector is estimated to be 1 trillion INR by the end of the year.
The second quarter of the year 2020 saw a severe blow of unprecedented scale in real estate sector in particular. Property sales declined by around 80 percent in major real estate markets of India during April and May 2020, as compared to a year before. New launches suffered a drop of 75 percent as compared to January and March 2020.
According to a report by India Ratings and Research, the ongoing COVID-19 pandemic is likely to push overall residential demand down by 25 percent, in comparison to 2019. Maximum decline in sales is seen in the affordable housing segment, i.e. homes priced up to Rs 50 lakh. Another report states that, the Indian real estate sector is sitting at an unsold inventory worth Rs 3,70,000 crore.
The unsold inventory rose from 4,42,228 units in Q4 2019 to 4,55,351 in Q1 of 2020. Mr. Deepak Parekh, Chairman of Housing Development Finance Corporation said the real estate prices in the country would correct by up to 20 per cent in the wake of coronavirus pandemic and the resultant nationwide lockdown.
This in turn has made the people who run the industry realize that business as usual can no longer continue. Innovation is a must and need of the hour. Now, real estate sector has always been slow in adopting the new technologies and no one can be blamed for it because the old way was good enough and real estate has always been one of the major contributors to the Indian economy. But with all these restrictions on social contacts and other factors arose due to this pandemic situation, adopting new technologies has to be the new mantra for the real estate industry.
For generations, real estate leaders were cautious in changing their business models. But in recent years there has been a significant change. So far the numbers have been on the lower side, but Covid 19, has initiated companies to adopt digital solutions at an unprecedented pace. According to a survey, digitisation is taking precedence across the sector and more than 90 percent of the occupiers and developers are aiming to bring a technological shift in their business operations within the next five years.
With the landscape changing on how we live in our personal and professional lives, innovative solutions in real estate sector can ease us into the new way of living. With companies adopting a work from home policy, the real estate industry will take a hit and yet it offers a wide range of opportunities if it adopts the right digital solutions. Some of the technologies that can be utilized can be stated below:
Virtual reality– With social distancing a norm and people being sceptical to get out of their homes, virtual reality can fill this gap. With the range of 3D interactive tools, enabling customers to virtual tours of properties is the future going forward.
Remote Communication– With many companies adopting a work from home policy, real estate leader now have to create space which will enable these companies to connect with their employees seamlessly on a virtual platform. There will be less requirement of space but there will be a huge demand for high end spaces which can incorporate innovation and the well-being of the employees.
Security– Post Covid 19, building security has become of the utmost importance. Existing security and hygiene policies will need to be upgraded to reassure the tenants. Automation security tools like visitor management are the need of the hour since we cannot risk the health of the security staff and all the people involved.
Touchless experience – Having a flow of people with minimum contact is the new norm. Biometric scanning or using QR codes for entry and exit from their building are some of the tools that can be adopted. Even automated, sensor based elevators are being used extensively.
As the nation is progressively opening up after the lockdown, the real estate markets have also started to recover. As per several leading research reports, India’s residential real estate market is on the path to a decisive return of serious homebuyer enquiries, which are at 50 percent of the Pre-COVID-19 levels in top cities.
The NRIs are actively inquiring about the property deals. This phenomenon is on the rise due to the weaker rupee, return of several Indians from the other countries and lower housing loan interest rates. The slowdown has also triggered the luxury home buyers to invest in premium properties. This trend is due to the attractive discounts and deferred payment facilities offered by the builders.
Everyone has to make major adjustments to the way we live and work. Accordingly, proptech companies must continue to evolve and innovate to accommodate all the changes coming our way as we navigate through the new norm that COVID-19 has created. Also with RBI and the Indian government announcing policies to help the real estate sector wade through this situation, so by correct adoptions of new innovations, the real estate sector can come out as a winner very soon.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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