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How is Real Estate sector dealing with CORONA Virus shutdown?

21 Mar 2020

CORONA is the major issue faced globally and has infected many people, almost 2 lakh people worldwide as well as claimed more than 7k lives across the globe. As the World Health Organisation is declared as a global health emergency, business sentiment is affected.

Currently, the coronavirus issue is forcing a shutdown of all business in metro cities like Mumbai, Pune, Delhi, Bangalore, etc. Schools, Colleges, Malls, Corporate Business Parks, Hotels, Entertainment Zones, all are shut off. Business is affecting everyone. Even the real estate industry is affected worldwide.

This outbreak has affected trade, imports and The traders are cautious to visit China and are worried about the decreased numbers in production for the upcoming financial year which will directly affect the GDP (Gross Domestic Product). This will affect the cost of steel and other raw materials required by the construction industry in India.

India heavily requires these materials used in construction activities from China. For example we import iron and steel products,technical construction equipment, plastic and fibre, electronics and solar panels.

Majority of the property buyers are from the working class and it becomes difficult for them to predict about their upcoming projects or tasks hence it will hamper their buying decisions as the loan would act as an added liability after buying a new property.

Currently, Italy is facing plenty of problems because infection is spread over there and they are struggling to take the right medical facilities to keep them safe. Actions have been taken such as shutting down shopping places and even banned tourist places as well, to avoid to spread the infections through crowd

Due to this current situation many builders are doubtful for their new upcoming projects to  launch so they are focused on their existing projects. There would be a slight fall on new projects around the world from 15 - 20% on this coming festival. Enquiries of projects are reduced so share markets are impacted.

But there are always 2 sides for each coin. So the scenario too has Positive and Negative impact. Current Real Estate sector is affected and has negative impacts but also the positive sides that it can deal with.

Negative Points:

  • Channel Partners and builders' sales executives are finding it difficult to get clients walkin on their project sites.

  • Property buyers who had booked properties with token amounts and are now hesitating to progress the deals with registration process. In fact there are cases reported, where client has asked for refund of the tokens or booking amount paid during finalizing the new property

  • Due to the negative impact on the import sector, construction of the projects are delayed or put on hold.

Positive Points:

  • As few clients are requesting a refund of token amount. Builders are giving cheesy offers to hold on with the client. Hence, new property buyers have an advantage of getting a best deal while buying new property.

  • Property buyers should visit real estate websites like www.3BRICK.com which allows property buyers to submit their own offer against builders quote.

  • Hence, CPs have best options to engage with 3BRICK.com Partner Zone and generate better leads in such a shutdown or slag period.

  • As people are now working from home so they are more on the internet so channel partners and builders can generate good leads databases which they can use further after the market is stabled.

3BRICK Property Buyer Register - https://www.3brick.com/register

3BRICK Channel Partner Register - https://www.3brick.com/partner/register

Real Estate sector might slow down, but it should see some improvement in Mumbai as the Gudi Padwa festival is nearing. Gudi Padwa is New Year day as per Hindu Calender for hindu community staying in the central part of India.

As the economy is impacted with Covid-19, so it is urged by builders to the authorities to use amount of 1 lakh cr that is collected from them for the ‘Building and Other Construction Workers' Welfare (BOCW) cess amount to provide for the loss occurred in wages and  healthcare benefits to workers.

Report says, there are a minimum 20K ongoing projects across the country out of that around 3K projects are in the Mumbai region alone. Undertaken construction work is around 18,000 of them so this involves a workforce of around 8.5 million in construction work .

According to the current situation, India has got less impacted. The recent report says, the effect of the outbreak will slow down the US and Indian economies also which will lead in making decisions late, reduce capital expenses and as a result slowing down portfolio decisions. It is also mentioned that the timeline of completion of retail mall projects would be delayed as sourcing for stock is mostly from china and it will lead to lag in projects that are in finalising stages and stores at supply stages.

Enquiries are also reduced that is the reason share markets and economies are affected. It will affect all the property sectors in real estate. The positive side for affordable property schemes that is demand would continue to exist all in all government incentives associated.