The Corona Covid- 19 pandemic has already affected real estate sector adversely by causing a fall in property sales.It is expected that funding from banks and NBFCs would soon become negligible. With another liquidity crunch in view , the developers hope that after the lockdown ends, sales will boost once more .
However, the sales wouldn’t be as high because the developers had expected because the outbreak has affected the buyers’ sentiment badly. it might be difficult for the real estate companies to sell their unsold properties as most buyers prefer newer projects. However, the top user market would have grown considerably if the pandemic had not struck.
The Indian realty sector was already affected by a liquidity crisis and a liquidity crisis within the recent years. Property sales had fallen drastically in most of the real estate hotspots. This was primarily due to the short-term ill-effects of several reforms which were originally aimed toward improving the economy.These reforms decreased the purchasing power of the many buyers, leading to a fall in sales and thus lack of enough credit for the developers. This, successively resulted in unfinished projects, bringing the industry to a standstill.
Lately the real estate sector was showing signs of recovery. the govt had taken variety of steps including a funding window of INR 25,000 crore to assist finish the stuck projects. The developers had been hoping that this slight increase in demand emanating from this era would help push up the sales.
It is however certain that thanks to a pointy price correction expected to require place after the lock-down, the market are going to be more buyer-friendly. Industry players also feel that with a large pool of units that are yet to be rotated , the general sentiments will move towards the favorable side at a gradual pace.
A number of developers are already announcing special offers on their properties. a number of these include discounts, free club membership, benefits in registration, etc. It are often noted that plots do well within the real estate industry, as buyers love the idea of having the ability to have a totally personalized home. it’s expected that plots would be leading the sales within the sector for now.
From an investment point of view, this crisis has also opened diverse options for NRI investors who are moving in to maximize the host of attractive properties, especially within the commercial segment. A devaluation of the Indian rupee & an outsized measure of volatility in other asset classes like stocks & gold price fluctuations, preferences of NRI buyers are expected to pivot towards land . With transactions starting to pick up, hope still prevails that the housing sector will emerge from these headwinds & reorient itself towards a more stable outlook.