How is COVID-19 Refashioning the India Real Estate in 2020

COVID-19 brought an abrupt transformation in almost every aspect of our lives, and the impact of this transformation is going to last quite long. The pandemic spread at such a massive scale that business processes and operations will not be the same anymore. The real estate sector is no exception to it.

A recent report from ANAROCK Property Consultants, in the second quarter of this year, housing sales fell down to 12,740 units from 68,600 units in the same period last year, registering a decline of 81%. The report also found new launches going down by 98%.

What does it look like?

Post the COVID crisis, we can expect several fundamental changes across different segments of real estate. The current scenario will lead to more buyers opting for ready-to-move or nearly completed projects to avoid unpleasant surprises. Furthermore, there will be greater demand for projects with larger open spaces, considering social distancing. This will require builders to increase investments to change architectural designs and expedite project completion.

The commercial realty will bounce back to operations too, in a different manner, though. Life residential projects, there will be a need for bigger office spaces. With work-from-home becoming a sustainable model, the builder would factor in the preference of a large population for offices near homes. This may involve providing additional space at home for office, and making provisions for business centres in residential communities to ensure the availability of essential services and standard amenities without having to travel much.

As for retail, the fear of virus spread has discouraged shoppers from visiting malls and given sizeable rise to ecommerce. This has hit the revenue of physical stores. Similarly, the pandemic has left a long-lasting impact on the hospitality sector as the need for travel and tourism has come down drastically, reducing the need for space in the industry.

So is it really bad?

Well, not really. Real estate pundits speculate that the sector will only get stronger than before, post the crisis. Although slowly, the demand for properties is certainly going to rise. However, the triggers and motivation for buyers may be different once the situation eases in. The focus will be on the safety and well-being of buyers and their family members. It will involve innovating existing architectural designs, revamping business models and embracing technology.

As buyers will look for more security, the demand for owned houses will go up. Additionally, NRIs will want to look for safe investment in properties back home, considering the ongoing financial turmoil and insecurities arising from the unexpected turn of events in the future. Real estate will regain the status of being a preferred choice of investment in the long-run and accordingly, builders with reliable rating and track record will earn the confidence of buyers as well as investors. A recent Anarock research found housing enquiries across Indian cities have gone up to 50% of pre-COVID times already, with Bengaluru holding the top place in the list.

For retail, while the physical stores may witness a downward shift for some time, the evergrowing online shopping will push the need for warehouse space.

Increased Technology Adoption

Post the pandemic, the realty sector will be seen investing significantly in technology across multiple aspects of the business. Below are quick few examples of innovations that we can look forward to:

·      Automation: In the recent few months, migration of labour has brought forth led to a number of issues, such as project delays, challenges in selling, high costs, among others. Automation will address these and many other loopholes in real estate operations existing for long. Additionally, builders will have constant pressure to complete projects in the shortest timeframe, leading to adopting advanced construction technologies for modular construction.

·      Virtual and augmented reality: The time to come will also involve the increasing use of VR and AR technologies. This will allow prospective buyers, still wary of the virus, to do a close virtual tour of the property and their future homes without having to visit in person.

·      Big data: The “new normal” will also augment the adoption of big data in more accurate marketing. Builders will want to spend their marketing resources more prudently by understanding buyer preferences and targeting the right prospects for their properties.

·      Internet of things: The use of smart sensors, connected devices and fingerprint scanners will be on the rise to ensure contactless access. The Internet of things will provide customers with remote access to their homes and an additional sense of security.

Thus, the COVID-19 situation looks to expedite technology adoption in the sector and fill many long-existing operational gaps for good.

While it will take some time for the real estate sector to bounce back to pre-COVID times, it will certainly emerge more evolved. Understanding of buyer psychology, technology-driven operations, and acceptance of real estate as a safe investment haven will be intrumental factors in boosting growth and making the market lucrative for both buyers and sellers.