The corona pandemic took the world by surprise last year and proved extremely difficult for business and industry. While all industries have made efforts to address this problem, it is real estate that has shown exceptional resilience and made significant use of technology that rebounded sharply in the second half of last year.
The second wave slowed down this recovery process to some extent. Some potential home buyers are taking a wait-and-see approach until the current wave subsides.
However, the ongoing wave of the corona virus is turning out to be less turbulent for the real estate industry as developers resorted to digitization during last year’s lockdown and in the months that followed, helping them maintain ongoing customer contact, take action to generate digital leads, and promise them at least virtual experience of their future home. All of this is possible because the industry has been involved in the adoption of the latest technology and has brought many of the processes associated with real estate purchases online. Technologies such as 3D viewing of properties, augmented reality (AR) and virtual reality (VR) have been deployed by industry players, eliminating the need for buyers to physically visit properties.
India GDP growth forecast
Many global rating agencies and financial think tanks, although recently forced to cut their growth forecast due to the second wave of the pandemic, remain optimistic about the good performance of the Indian economy. Even the ratings agency Fitch hopes that the second wave will harm the economy less than the first. “We expect the economic shock from the latest wave of the pandemic in India to be less severe than in 2020, even though the number of cases and deaths is much higher. The authorities are tightening restrictions, and companies and individuals have adjusted behavior to mitigate the impact, ”said a recent statement.
The stock market also experienced a second wave, albeit with minor disruptions. While stock markets crashed last year as the viral load raged, this year they have shown a pliant stance as well.
The industry is in decline this year also due to the fact that there were only partial blockages in various states of the country. While businesses are currently facing a grim scenario, there has been some progress in ensuring that many business transactions are handled prudently.
Only a partial blockage has secured a raw material supply chain this year for developers who do not anticipate large delays in the delivery schedule of their projects. Even migrant workers, to a greater or lesser extent, will continue to stay on sites this year if contractors or developers take multiple security measures.
The pandemic has led to a growing awareness among people of the need to have their own home. The current low interest rates on home loans make it easier for them to do this. With Continuing to Work from Home (WFH), many company employees have returned to their hometowns and are now looking to buy a home there for themselves, as there seems to be no end to it. WFH mode coming soon. This also leads to a shift in consumer interest in Tier II-III cities.
It cannot be denied that both new launches and sales figures over the past 5-6 weeks have been skewed to some extent. However, if current vaccination gains a steady pace over the coming months, it could spark movement and help the industry get on a trajectory of decent growth.
(Posted by: Nagaraju Rutu, CEO of Hero Realty)