The ongoing pandemic has caused large-scale disruptions across sectors and real estate is among the most critical ones. Volumes of transactions fell down drastically in April and May and now coming back to normal in rental and in some time should also improve in buying. Construction of many projects has come to a grinding halt. RERA extensions have put homebuyers in a difficult spot. Although the industry has been let down by force majeure and human factors, many industry veterans have been quick to identify a hidden opportunity. Here are a few realities that are changing the realty landscape in today’s time.
Technology has given a major boost to the sector when stepping out was not an option and social distancing is imperative. Since physical site visits are not possible—in fact, unsafe for both the parties—several realty players are taking the digital route to continue serving their customers and ensure continuity in sales. Virtual reality (VR) tours, artificial intelligence, and data analytics, among others, are some of the advancements that players in this space are effectively leveraging.
Buyers don’t have to take out multiple days to scan properties and shortlist the ones that best suit their interests. Instead, they can take virtual tours from the comfort of their homes and get a 360-degree view of both interiors as well as exteriors, including decor, fixtures, restroom fittings, etc. As prospective buyers get familiarized with this new process, they have started shortlisting and transacting even during these unprecedented times. In fact, it is an opportune time for those with job security and adequate cash flows to buy homes as prices are very reasonable.
Banks, too, are assisting in this transition to digital processes. They are integrating APIs so that the customer on-boarding process could be made simpler. Banks are also sanctioning home loans online on the basis of documents uploaded. They have moved to a digital process for providing loans based on soft copies of income and property documents uploaded by the borrowers. This has come as a boon to home loan borrowers who can get their loan sanctioned online and sign the agreement to get the loan disbursed immediately. It cuts down massively on time spent in physical visits and verification and makes the process faster and transparent and trackable.
Supportive government initiatives
The Reserve Bank of India (RBI) has taken laudable measures to boost the realty sector and cushion the impact of the crisis. For instance, the reduction in repo rates by 40 basis points to 4 per cent and reverse repo rates to 3.35 per cent has been the highest ever cut in interest rates, and will certainly act as a huge breather for homebuyers and realty players to address the current liquidity challenge. This has benefitted buyers in the form of cheaper loan EMIs.
Similarly, the further extension of loan moratoriums by three months (up to August 31, 2020) will help the players to overcome liquidity challenges.
The government’s focus on affordable homes is more than ever visible now as it realizes that in order to get the economy back on track, it is indispensable that real estate must be brought back on track.
Importance of homeownership
The last few months have made many people realize the importance of owning a home, as it is where they spend most of their time. Home is a new workplace.
As people continue to work remotely, they are realizing the significance of having a home office. Considering all these favourable aspects, there can’t be any better time to buy a dream home that fits all the needs in the wake of transition caused by COVID-19. As a result, renters are now looking for investing in their first house. The affordable housing segment is going to see an uptick due of this.
The growing need for ready-to-move-in properties
Since a major part of India’s population is either facing or fearing job losses and pay cuts, they are not in a position to make risky investments. However, with the growing importance of having their own house, they are more likely to park their money into projects that don’t involve delayed construction and delayed possession risk. They are there looking to buy ready-to-move-in homes where they can immediately shift.
The future roadmap
There is no doubt that COVID-19 has significantly affected the Indian realty and presented new challenges, mainly in the form of a slowdown in sales and challenges related to liquidity. However, with government initiatives coupled with increasing usage of proptech tools and other tech advancements in this space, realty players can ensure business continuity even during these turbulent times. On top of it, the growing inclination towards homeownership among people—especially the first-time home buyers—is further boosting the sector’s morale and enabling builders and contractors to keep the ball rolling.
Meanwhile, builders and developers should focus on clearing off properties that are ready for sale, rather than investing in new projects. Doing so will prevent them from further risks and losses related to delayed construction. Considering all these factors and the opportunities created by the current crisis, Indian realty is envisioned to bounce back and return to its feet in the post-COVID world. With bated breath, the industry is now looking forward to these estimates turning into reality.