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Impact of COVID on Hyderabad Real estate

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Impact of COVID on Hyderabad Real estate

Last updated: April 11 2020
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  • Impact of COVID on Hyderabad Real estate

    Hello Friends,

    I know most of us are in panic situation about the hyderabad Real Estate market due to Covid Lockdown.

    I dont say that we need not worry but at the same time i urge all friends to look at positive side and the oppertunities that we can think of.

    Here is the SWOT anaylsis shared by our INDUSTRY EXPERTS for us to understand our oppertunities

    Strengths:

    * Real Estate non-perishable product

    * Housing is always need

    Weakness:

    * Loss of jobs & uncertainty of jobs

    * Buyers thinking "Let me wait and watch before buying a house"

    * Lack of trust and confidence among buyers: "Will I get the product on time"

    Opportunities

    * NRIs are finding India attractive

    * Dollar has become stronger

    * "Let me find a home in India"

    * Equity market has taken a beating -> loss of confidence. Therefore Real Estate is more secure & safe, therefore a better opportunity.

    Threats

    * Low Sales

    * Challenges in collection Collections

    * Having liquidity (which is why I've suggested to the govt for 1 year moratorium on loans)

    * Uncertainty of Covid-19

    * Govt is doing an excellent job

    * However, lot more testing needs to be done.

    * Actual figures much be much higher

    * Once testing starts, numbers will be very high.

    What we need to do, and how we can mitigate our risks:

    *Housing*

    * When lockdown opens: Complete projects in a war footing. Don't cut corners. Quality product will always sell.

    * Do not compete on pricing. Do not show desperation. Protect margins.

    * Don't spoil channel partners by paying extra.

    * Be careful of new launches at least by 2 Quarters. Focus on completing existing projects.

    * Teams have to collect outstandings

    * Don't listen to static, it'll lead to loss of confidence

    *Retail*

    * During lockdown, retailers will not pay rent. Take care of them, so that they don't empty the shops.

    * Difficult time because EMIs are on, and maintenance costs are on.

    * I've made request to electrical boards: please don't charge on connected load, and only on consumption.

    *Commercial (Office & IT)*

    * We should make sure Commercial office clients pay rent. They're in possession of our properties. They're able to work from home because servers are located in their office.

    * Take a look at your agreements with clients.

    *Managing Team*

    *use digital systems to maintain relations as well keep updating about project.

    * Keep morale high

    * Make sure everyone is contributing to the organization

    * Either they become ordinary to extraordinary or ask HR to take a decision

    *Finance*

    * Managing money in these times is very critical.

    * Many new deals will come to you. Avoid temptation. Don't make new deals till end of 2020. Keep the cash.

    * Land prices will cool down. After Covid-19 a lot of new opportunities will open up.

    * If you can conserve cash, avoid temptation, you'll have a lot of opportunities.

    * Balance need with greed.

    * On loans: Ideally you need at least 6 month moratorium or more.

    * If customer postpones EMI, will Bank release our money? It's a balancing act.

    * Bad times do not lost. It has never last. I believe demand will come back.

    * Finally: Enjoy your work, don't worry about profits, money. All problems will find solutions. Get your Ikigai. Bring in happiness in your life and in others. Don't get stressed out. Have the passion & creativity in your work, so that you wake up excited every morning

    *Question & Answers*

    Shall I continue Digital marketing?

    * Depends. It's a balance. Re-evaluate your Hoardings.

    * Strengthen your online presence. Make your Website. Make pricing transparent.

    * Adopt best online practices for your website.

    I'm in the Hotel industry. How I do I survive?

    * What have we done:

    * Cut overheads

    * GM has taken 50% of salsary

    * Mid-level: 25% cut

    What's the affect to Tier 2 cities.

    * It's not a matter of Tier 1, 2, 3.

    * Common advice for all. Don't stop work. Once it's a ready product, it will sell.

    * Don't open up new fronts. Focus on existing projects

    * Avoid outflow. Get inflow and become strong.

    Any comments on affordable housing. How will the trend be?

    * The demand is coming from mid-income and affordable housing

    * Luxury segment is just 10% to 15%.

    * Mid-income and affordable housing is evergreen.

    How do I value asset with the change in market during COVID and after COVID

    * It's a balancing act

    * I don't see the value of housing going down.

    * However for commercial cashflows are not coming in, so you'll have to see accordingly.

    * This situation will not last forever.

    Will cost of construction come down?

    * A-Grade construction can be done at Rs 3000/sft

    * I don't see cost coming down.

    * There maybe a short term increase in pricing.

    * In Mumbai premium charges are huge. Try to bring these down by convincing the government.

    The next pandemic is around the corner? How do we prepare?

    * Nothing is certain

    * We need to be deal with this one now.

    * I'm hopeful things will stabilize in the next 3 months.

    * Mentally be prepared for a delay of 5 to 6 months.

    Can we request RBI / Govt to reduce interest rates for a period of 1 year to control expense of over heads

    * The one thing to give oxygen to developers, postpone the repayment and reduce the interest rate

    * I request CREDAI seniors to make a strong representation to make this a reality

    How do I get Cement prices, as we used to have long term contracts, which is not possible now?

    * Their factories are also not functioning.

    * They also need buyers.

    * If you get the same price as before, that would be a good deal.

    * CREDAI can negotiate a uniform price for all, will be good.

    Can we ask govt to set-off GST for 1 year?

    * The current GST structure is increasing the cost of the product cost by 18%. Customer suffers.

    * We need to get input credit, and convince the govt to introduce it back.

    How do you rate the warehousing sector in the current scenario?

    * Warehousing has an opportunity again.

    * The rents are low, so you have to have low land & construction costs to make it work.

    Hence STOP WORRYING and

    * Stay in touch with team

    * Keep morale high

    * focus on learning

    * How to keep costs low



    Regards


  • #2

    #2

    Re : Impact of COVID on Hyderabad Real estate

    No doubt about It, contravirus is going leave its strong negative foot in entire indian real estate market also unlike other product segments like cosmetics , auto mobile, electronics , appeals etc.

    The effect may briefly in 3 ways retrospective , prospective and loss for the existing serial investors in real estate industry . retrospective and prospective since frest works my start at lowest price and it will be prospective to new investors/fresh investors.

    the known common rule of economics i.e demand and supply applies here also. But it will be in different way because the existing investors who invested in the last 1 year will has to book his loss and the serial investor as real estate is a hoby my prosper little bit . infact , the economic showdown has already shown its equilibrium arrow to real estate market . Existing log terms investor will gain by selling and ready for reinvestment, short term investor my or not, for ANGEL INVESTORS it is "wellspring " for next 2 years. when it come to hyderabad the prices has reached its peak and every individual has experienced trial and error . Now the fresh will yet to start in next two months the pull will take 6 months due to correction in income levels, job market, existing business rollouts and how much percentage of freshers will show their interest is the matter



    There are advantages to hyderabad real estate market compare to other metros like distance and developments in adjacent areas., atmosphere, availability , price . There is a biggest hope on speed pull decorker i.e TS government .

    No doubt that in next 3.5 years this stable government will create its benchmark once again .



    Again and again i welcome freshers, youngster , newly carrier starters to invest on open land which is limited for ever and it will give security for life at any point of time as life is a unkon journey we need to keep running, fast or show don't matter .

    One need to run today for secured tomorrow with a hope .

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