Real Estate Sector – Positive Outlook Post Lockdown
Coronavirus pandemic has influenced the world dramatically in all sectors. Economies have been suffering badly due to lockdown. The real estate sector is not far from its effect, as the market was completely shut for the past few months. Funding from banks and NBFCs are expected to become negligible. Developers are hoping a boost in sales again after lockdown due to expected liquidity crunch.
Here are some points towards a positive outlook for Real Estate Sector post lockdown:
Resuming Construction Work
Construction projects with large scale investment are assumed to be the first ones to resume its construction activity. Projects who were on the verge of completion before lockdown will be prioritized and builders would want to handover these projects. All efforts will be centered towards the projects who were supposed to be completed in 2020.
Positive Message to the market
A number of real estate experts have suggested that the onset of construction activities will spread a positive message to the market. It will be a great sigh of relief for investors, developers, employees and home buyers. It will ensure significant cashflow in the projects which are near completion and attract new potential buyers towards the properties.
Real estate sector was suffering from liquidity crisis and credit crunch since last year. Post lockdown it is expected to show signs of recovery. The government had taken a number of steps including a funding window of INR 25,000 crore to help finish the stuck projects. These steps by government will attract buyers towards real estate and slightly increase the demand to help push up the sales.
Price Correction is Real estate
Price correction is a term used by real estate developers, when the prices of the properties reduces by less than 10% of the previous cost in that year. It is clearly acknowledged that a sharp price correction is expected to take place post lockdown. This will make the market more buyer friendly for the customers. Developers with large projects are expecting this to turn into their favor gradually after the lockdown.
COVID 19 pandemic has opened up diverse options for NRI investors, who are looking forward to investing on attractive properties, especially in commercial spaces. A devaluation of the Indian rupee & a large measure of volatility in other asset classes such as stocks & gold price fluctuations, preferences of NRI buyers are expected to move towards Real Estate. With transactions beginning to pick up, it is expected that the housing sector will emerge from these headwinds & redirect itself towards a more stable outlook.