04 May Impact of Coronavirus on Indian Real Estate
Started in Wuhan, China, the coronavirus is spreading like a wildfire and created a wave of panic, globally. At a tally of almost 53,000 confirmed cases and 2000 deaths has affected every factor of human life. To contain the spread of this deadly virus, the Central Government has regulated a nationwide lockdown. This unprecedented challenge has impacted every sector, especially the real estate, auto, retail, and, banking are among the worst affected sectors.
The Indian economy has reportedly at a setback and to a record of 11-year-low. Hence, it is anticipated that Asia’s third-largest economy will witness worse days.
This is evident by the downfall in the real estate sector. As per the data, India’s nine major markets are seeing a decline of in the housing sales by 26%.
Factors Impacting the Real Estate Market
The projects are delays because the construction is on halt.
There is a disruption in the demand and supply cycle as the developers have postponed all the projects scheduled in March-April.
The costs of raw materials greatly increase after the upliftment of the lockdown.
It has created uncertainty whether people will engage their money in the real estate sector after lockdown.
Impact on the Market
Indian real estate is the second-largest employment generator, which is at the present in a critical state. Although, there is a relief because of the government policies to revive demand. The policies include higher tax breaker and the lower interest rate on home loans. The sector anyway was facing pressure due to various regulation such as RERA, GST, and demonetization. The slowdown in the demands will affect the cash flow in the market as well as possessions. This has triggered the liquidity concerns of the developers. Therefore, the Maharashtra State Government has given a three-month extension in the completion timeline.
Due to lockdown, the sales and construction activities have come to a halt, which is predicted to cause a delay of 4 to 6 months in project completion.
Impact on the Developers
The outbreak of COVID-19 has jeopardised the developers plan for the next 4-6 months. Developers were already sitting with unsold stocks, and now not only the sales are on halt but also the supply of manufacturing material and equipment. Therefore the developers are forced to postpone the orders, increasing the defect. Also, the builders are also facing EMI offs for the next three months. But there is no doubt at the top developer like Vivansaa Group that has been offering premium apartment in Pune and Bangalore at affordable prices for nine years.
Change in Buyer’s Attitude
The low-interest rate and the high tax exemptions will encourage the buyers but the pandemic situation might cause a shift in their attitude. In addition, the delay of salaries can also keep buyers from inventing. Some might postpone the decision until they get clarity regarding the whole situation.
If your plan of investing in real estate is not deferred due to the coronavirus then you can consider the ongoing projects of Vivansaa Group. The apartments offered by Vivansaa showcase the finest combination of luxury with comfort and affordability.