A global pandemic aka Coronavirus (COVID-19) has gripped the world hard and wreaked havoc across all sectors. This novel epidemic has hammered real estate the most and triggered disruptions in business cycles in India. The property sector was witnessing green shoots in the infant stage of the year 2020 and property gurus were upbeat about its turnaround after going on a downslide in the past couple of years.
Property sales picked up and home seekers warmed up to the Property sector again in the hope of fulfilling their long-cherished dream of owning a home. Foreign investors too were gung-ho about the Indian property sector as was evident in their investment commitments during the flag-end of 2019 and the start of 2020.
However, this new unforeseen calamity poses another battle for the real estate sector.
According to various industry experts and leaders, supply of new projects is expected to witness a slump by 15 – 20 percent due to prevailing conditions like coronavirus epidemic, a crawling economy and liquidity crisis.
In the first three quarters of FY 2019-20, the top eight prominent listed builders & developers in the country launched merely 15.7 million sq. ft of residential space, whereas in the same period during 2018-19, launched 31 million sq. ft.
The affordable housing segment will be the first segment to face the heat of this pandemic. Most homebuyers belong to working-class categories and when most prospective buyers are worried about their job stabilities, they will obviously defer their home-buying plans. Though various benefits inferred to home buyers like tax rebates and easy access to credit from banks and NBFC will ensure affordable segment growth or stability. However, mid-segment is likely to witness recovery on the improvement of hiring outlook.
Now a real question arises here, how this self-quarantine industry during coronavirus pandemic will advance and tackle this troubled situation? In this perturbed time, technology is the key to drive and sustain the business as usual. Proptech startups and real estate tech-driven companies could sail through this distressed period. Historically, real estate is an investment heavy industry, but a laggard in terms of technology adoption. Real estate is the second largest manpower employers and contributes around 7% of the country’s GDP has neglected technology at its core.
Early movers of Proptech startups like Square Yards and others could leverage these prolonged tough times and help builders and developers to uphold business as usual through their technological innovationS. The impact of coronavirus is being felt by real estate, in the last one-month overall footfalls at real estate office, construction site or sign up for new purchase has witnessed slump by 25 – 30 percent.
How proptech startups and tech-driven companies could rescue the real estate industry in this troubled time? In the wake of COVID-19 pandemic situation, conducting Digital Events instead of physical property shows could be an alternate option to invite potential homebuyers for events. At this unsettled time, as per government notification, public gatherings are being discouraged and organizing Digital Events is an option to meet business obligations. Mumbai based real estate builder Vijay Khetan Group is mulling a digital launch of their project in Andheri East in March 2020 where it will accept requests from customers online and provide slots for site visits to avoid gathering.
Usage of technology like Virtual Reality (VR) could potentially reduce the need for physical site visits of the property. This cutting-edge technology assists home buyers, visitors and even renters to experience a digital walkthrough of the properties. Virtual Reality saves time, money and energy of both builders and home buyers. Various proptech startups have developed products that enable heavy virtual worlds to be recreated and run seamlessly on all devices.
Development of 3-D Visualization Model of micro-markets and residential projects can save time, money and reduce gatherings for property site and micro-market visits. These technological models provide a real experience of micro-markets without any physical visits. Homebuyers can book their property based on the 3-D Visualization model without any single site visit.
The overall real estate industry is in wait and watch mode as the impact of the virus can’t be estimated at present. Builders and developers have to put brakes on new launches and focus on selling existing inventory rather till COVID-19 problem is settled.