The Impact of COVID-19 on the real estate market in India: Can the market survive another wave?
Last year in March 2020 when the coronavirus hit India the uncertainty of the future in the mind of general public left a scarring effect on the real estate market. The nationwide lockdown almost brought a stop to the operations within the industry. Since then, the market has picked up its own pace for recovery from one of the biggest hits, the industry has ever witnessed. The last time the industry saw a downfall was in the November of 2016, when the Prime Minister demonetized the currency with an aim to eradicate the unaccounted & black money in the country. But the market did bounce back quicker than anticipated. After the first wave of COVID-19 hit the market, the market was slowly recovering on its own pace but soon enough the second wave hit the market making an equal impact as the first one.
The mass exodus the migrant construction workers was one of the biggest economic crisis faced by India which almost seemed impossible to tackle with.From negligible homebuyer enquiries and site visits to never-ending curbs on the construction activities, the crisis caught the real estate sector unawares. After a series of lockdowns and restrictions all over, the country started to get back on its feet by July 2020. The pandemic forced the real estate sector to employ digital business strategies, which led to a rapid transformation of many sorts.
The after math of lockdown due to COVID-19 has had a huge impact globally. Some of the factors are largely dependent on region and asset classes. The real struggle and concern among the real estate executives is preserving the value and liquidity, keeping tenants and visitors safe, increase the cleaning measures aligning with COVID protocols which also comply with the rules and regulations released by the government.
Experts estimated that the market could recover completely in 2021, as given that the enquiries, site visits and sales had started nearing the pre-COVID levels in most of the cities. However, the upturn of Coronavirus in a more fatal form by March 2021 sparked fears far worse than the last year. With several cities like Mumbai, Pune, Bangalore and Delhi NCR undergoing partial lockdowns and masses struggling for healthcare, the realty sector has seen another blow.
Impact of Pandemic COVID-19 on commercial and retail real estate in India.
With the increase in remote working and work from home, the office leasing sector in the industry is barely surviving. According to a report by Cushman and Wakefield, the net leasing of office spaces declined to around 35 lakh sq ft in Jan-Mar 2021 from approximately 70 lakh sqft in the corresponding period of the year 2020. Since Q4 closed on a positive note as the vaccination drive by the Government picked up the pace, the sudden spike in cases across the nation since February onwards did not bode well for the recovery cycle, and the occupiers remained cautious in the Apr-Jun 2021. Resultantly, the potential leasing transactions were further delayed and impacted leasing rates.