COVID-19, REVIVAL-20

Indian Residential Real Estate: Demand side strategy (Part – 1)

At the outset, this is no analysis of how it will take ‘X’ number of months/ years for the Real Estate Market to revive in India. There is so much of such literature advising caution, one could find easily.

This is more a common-sense driven and straight forward strategy for now and beyond, as we slowly come out the Covid-19 lockdown, to do our bit for an expedited revival of the Residential Real Estate sector.

This is a 3-part presentation, with Part-1 (this) focusing on Demand building, Part-2 on ‘How Government can enable’ & Part-3 on ‘What to keep in mind when planning future projects’.

While it is easy to see gloom in this phase, and while it is certain that some things will change immediately and possibly forever, here’s a quick reminder of what will not change:

·     People will still buy homes. Shapes, sizes & requirements may change, but the demand will be around forever.

·     Good products, which are carefully thought and built with the customer at the center, will find buyers.

·     Resilient players have withstood many a storm, and this will also pass.

The changes that are quite imminent in the World, post Covid-19 lockdown, will have a clear impact on the Residential Sales, and here’s how the “New Normal” may look for the sector & how one could plan for Sales, in the immediate future:

1.    Customers are grappling with lesser Salaries/ reduced variable pay

·     Work with banks to come up with Progressive Loans, where the initial EMI’s are smaller and grow each subsequent year

·     Help customers avail maximum funding from the loan agency, to help with initial down payment

·     Plan easier payment schedules for customers optimizing the cash flow requirement

2.    Customers have Job loss fears, whether they state it explicitly OR not

·     Work with Insurance companies (as an Industry body) to create a product to cover EMI’s, in case of genuine job losses

·     Provide ‘Job loss protection plans’ & assure customers of liquidity, when in need

3.    Customers want to wait for the dust to settle before they make the buying decision

·     Offer price protection plans to customers, and be genuine about it

·     Explore an ‘Expression of Interest (EoI)’ mode of Sales, where they get additional time to make the decision and can avail 100% refund if they’d like to go back

·     Explore interesting offers, which don’t scream “I’m desperate”, like a ‘Work desk and an ergonomic chair’ could be in sync with the times

4.    Customers expect prices to fall/ drive in a harder bargain

·     Explain to them how the cost of construction material and the cost of safety is going up, and there isn’t much scope for price to fall in an “under-construction” OR “ready to move in” project

·     Show via an illustration, numbers of how much they will save if they buy now, and offer them the best price possible

·     Explain to them the 80EEA benefit of increased relief of Home loan interest payments upto 3.5 lacs apart from other benefits of buying a home

5.    There are clearly fewer buyers now than ‘Before Corona’ period

·     Expect fewer sales & plan your financial model/ cash flows basis this

·     Extreme focus to be on keeping existing customers ‘happy’ & ‘asking’ them for referrals. Keep in touch with them and update them regularly, atleast once a month, on Project status.

·     Offline will lose its sheen for a while atleast. Optimize your online spend and diversify. Add geo-targeting and any other means of online & offline hyperlocal targeting means

·     Listen harder, participate in webinars, accumulate trends and learn best practices – fast

·     Go Digital to expand your Target Group. Invest in creating project walkthroughs, virtual tours, actual site HD Videos and photos

·     Incentivize Sales people accordingly – the climb is going to be tougher in the short term

·     Encourage Channel Sales, more than ever, by making interesting offers and be ‘top-of-mind’

6.    More people will work from home, especially in cities across India.

·     Offer co-working/ office space as an amenity inside the project

·     Provide a stable broadband as a standard

·     Ensure 100% backup power, to reduce their downtime

·     Work with telco’s to provide better mobile network

·     Create space for a grocery store inside the campus/ Tie-ups with local Groceries, medical & essential supplies

·     Plan for the extra load on resources including heavier usages of Gym and other facilities

7.    People will be wary of pandemic recurrence/ newer versions.

·     Create disinfectant/ Ozone chambers at entry gates, as a permanent feature

·     Have temperature scanning devices at all entry points

·     Disinfecting the campus frequently either using inhouse or outsourced staff.

·     Look for contact less entries for residents & visitors

8.    Contact-less deliveries to be factored in

·     Create spaces for storing and delivering food, groceries, courier, medicines and other supplies received at the gate

·     Build technology to allow ‘within the campus’ coordination

In all, the call is to contribute and build the Revival story – well, as Builders!