The disruption caused by COVID19 is likely to push the demand for gated communities with self-sustainable ecosystem!Market projection suggests that young families will seek environments that are controllable, safe and secure, while providing amenities that reduce need to venture out.
An analysis of the real estate sector said that townships and condominium complexes, that are augmented or with adjacencies to schools, health facilities and recreational options, will witness higher demand. ‘New developments will witness design evolution, as business centers will become common place within gated communities and building clusters. Demand for tech enabled services for various domestic chores (housekeeping, food preparation, driving, house managers etc.) will likely see a substantial uptick in metros and large cities.
Here are some potential impacts of the current situation on the real-estate sector. The housing sector is expected to see the muted demand with significant reduction in the new launches. The buyers only would be the end user, who is residing on a rental accommodation or wish to upgrade their smaller property to bigger or rural areas to urban. Another aspect of the real estate is the commercial property. With the expected slowdown in the US and Europeon economies, the existing demand for commercial real estate may either get curtailed or postponed till H2 (second half of the current year).
Outcomes:
1.The highest possibility of postponements of REIT (Real Estate Investment Trust) launching, which means further liquidity pressure on real estate developers.
2. Fresh equity investments into Real-Estate sector of country will slow down, with almost all sectors going through turmoil.
Results:
The prices of steel, cement, bricks, labour vages and logistics are likely to increase thereby leading to increase in price of property developing currently or it could be compensated by a cost cutting through unemployment (post COVID 19) of around 30 percent.
Real Estate Overview:
The real estate sector is one of the largest employment generation in the country and has a multiplier effect around 250 allied industries. The sector is expected to contribute to around 13 per cent to the country’s Gdp by 2025 and become the third largest globally at USD 1 Trillion by 2030.. However the year 2020 has been and will be a mixed bag for the Indian real estate industry, having attracted investment worth USD 5 billion. Around 66 percent of these investments would be in the commercial real estate owing to healthy demand from private equity investors for stable rent yield assets. This was unexpected to boost growth by steering consumptions in real estate and associated sectors.
Column by Gaurav Kakkar
A Real Estate Marketing Strategist and Sale Influencer