The Short-Term and Long-Term Effects of Coronavirus on Real Estate
The coronavirus crisis is reshaping the world in lasting ways, from how we used to travel to how we buy homes. This novel virus that has contained us in our homes is reorienting our approach towards all aspects of the world around us. However unfamiliar and unsettling it may seem, it’s best if we prepare ourselves with what’s to come.
COVID-19 has altered the functioning of many individual industries. Real estate, for one, is going to dwindle before it gets better. The overall extent of effects will vary depending on the duration of the economic shutdown. The Indian government, nonetheless, is trying its best to devise plans that can help revive the economic conditions.
Short-term effects on real estate
- 1. New homebuyers will likely push their property purchase decisions to after they get more clarity on job security and regular cash flow.
- 2. One can expect a demand slowdown of residential properties for the next couple of months.
- 3. Slowdown in the supply of construction items or shortage of labour can further push the timelines of ongoing real estate projects.
Long-term effects on real estate
- 1. Since real estate is largely an employee-based sector, companies can face difficulty in completing the restoration of labour supply.
- 2. The pandemic has resulted in the closure of shopping malls, entertainment hubs and retail outlets, which could lead to on-going commercial real estate deals to be placed on a temporary hold.
- 3. Builders are most likely to face a capital crisis, particularly needed to restart construction work and keep it moving.
As a ray of hope, certain state governments have announced an extension in project completion timelines. Additionally, the government is doing everything in its capacity to provide relief to the real estate sector.
Impact on homebuyers and what they can do:
Although the lockdown and uncertainty has led to a slowdown in the demand of new purchases, the unchanged Repo Rate, low-interest rates and high tax exemption has left a relatively positive impact on buyer sentiment. It points towards buyers showing interest in investments, however, the final decision process can only be seen in medium to long term.
Since site visits have become next to impossible, many are turning towards newer ways to seek out property details. In this regard, House of Hiranandani is offering all means possible to offer virtual support services, including a 360-degree up-close virtual tour of all of their properties. For those looking for investment opportunities in burgeoning modern neighbourhoods can find beautiful luxury apartments in Hebbal, Devanahalli or Bannerghatta, Bangalore.
While it is true that the real estate sector is set to face a slight pullback for the next couple of months, it is also a good time for most homebuyers to ascertain their investment options. And while you do that, keep an eye out for House of Hiranandani properties using the virtual tour support.