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The nation is under an unprecedented crisis, something that has never happened before. At the onset of the year, with cases under control and vaccines in the vicinity, it seemed that we have got past a major crisis. However, to our dismay, the second wave came at a much larger ferocity, dismantling all the positive pictures that were painted.
The 2nd wave has moved likes wildfire grappling most of the major cities of the country. As cases are soaring, the entire public and private healthcare system is under tremendous strain despite showing every possible resilience in the face of the deepening crisis.
Needless to say, the Real Estate market has also tumbled with a significant decline in the overall sales momentum. This is a double whammy for the sector that showed signs of revival in the last quarter of the previous fiscal after a prolonged period of slowdown. While the sales volume picked up fast during the beginning of the year, the current numbers once again look dismal after lockdown 2.0.
The Focus is to fight the crisis first
The magnitude of the challenge continues to intensify and the official statement by the government that the problem will be contained very soon is contradicted by the ground realities, where cases and mortality rates are soaring high.
However, we also have immense trust in the capability of our medical system and alongside the collective effort of our citizens and strategic acumen of our public administration bodies and financial institution to chalk out a feasible solution.
In this regard, some of the decisions taken by the RBI are also plausible. Recently, RBI has provided a window of INR 50,000 CRORES to the healthcare sector and other ancillary industries. This liquidity infusion will help to quickly build the required infrastructure and capabilities to fight back the challenge effectively. The RBI’s decision to offer MSMEs to restructure their loan on a case-by-case basis is another good step as it will provide a lot of breathing space amidst the demand destruction.
Industry Downtrend will Continue amidst some hope
During such a crisis, any quick bounce back in the market is farfetched. However, the industry has faced a crisis in the past and was able to successfully mitigate the risk to a large extent pinned by strategic acumen, recalibrating product portfolios, and rapid digitization. The government-backed impetus was also a crucial enabling factor in the market uprising.
Once the cases will come down and the situation will normalize, a similar revival in the market is expected in the next 2-3 months’ time period. Meanwhile, the fraternity will continue to showcase some limited maneuvering. Old pipelines are being catered to with a limited emphasis on new customer acquisition. Both advisories and developers are investing in upscaling the digital capabilities and innovations such as digital launches, AR & VR-based solutions, online viewing of properties, and much more, as going forward this will be the principal source of marketing, branding, and customer acquisition.
New Trends will Emerge
In the short, to mid-run numerous new trends will emerge and other existing trends will be fine-tuned.
. Interest will continue to gravitate towards Ready to Move (RTM) properties or units that are nearing completion. The COVID crisis will continue to be a destabilizing factor in the economy and hence most of the buyers will try to minimize risk.
. There will be more interest in low-rise housing and plotted development.
. Affordable homes will continue to garner increased interest.
. Real Estate’s reputation as a tangible asset will continue to garner interest. In a time when the financial markets will be tailspin, real estate as a valuable investment asset will consolidate its stronghold.
. Once some early signs of normalization will be visible, developers will come up with a host of attractive payment plans and discount schemes to lure more buyers. This should act a force multiplier.
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