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How will Coronavirus COVID-19 outbreak effect or impact Real Estate in India

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How will Coronavirus COVID-19 outbreak effect or impact Real Estate in India

Last updated: 1 week ago
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  • Re : How will Coronavirus COVID-19 outbreak effect or impact Real Estate in India

    The growing number of Coronavirus cases has already had a great impact on the office or commercial market in India. Some major property brokerage firms have revealed that the January-March period of 2021 showed a significant decline in property leasing activities in the office real estate segment by almost 48%.
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    • Re : How will Coronavirus COVID-19 outbreak effect or impact Real Estate in India

      this quarter starting from April will show huge decline and negative growth highest of all time.

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      • Re : How will Coronavirus COVID-19 outbreak effect or impact Real Estate in India

        The Real estate bubble is now going to burst. Both residential and commercial real estate have muted demand and so is due for a significant price correction.

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        • Re : How will Coronavirus COVID-19 outbreak effect or impact Real Estate in India

          Covid's second wave unlikely to materially impact large construction companies

          Nevertheless, projects which are located within the urban areas such as metro-rail projects, building construction etc. are likely to feel a greater impact due to localised restrictions and reverse migration of labour.
          NEW DELHI: In ICRA's assessment, while the ongoing second wave of covid-19 could cause some disruptions in the overall construction activity in the country, the performance of most mid and large-sized construction companies is not expected to be materially impacted due to this.

          Unlike the first wave, there is no nationwide lockdown and only localised lockdown with exemption for construction activities.

          Abhishek Gupta, assistant vice president and sector head, ICRA, said, "While the second wave is more widespread than the first one, the Government is not considering nation-wide lockdown yet, given the severe economic fallout of disrupting major economic activities. With this, the reverse migration of labour has also been significantly lower thus far, compared to that witnessed during the first wave. While the situation is changing rapidly, as things stand today the disruption in construction activities is not expected to be severe."

          Nevertheless, projects which are located within the urban areas such as metro-rail projects, building construction etc. are likely to feel a greater impact due to localised restrictions and reverse migration of labour.

          Prior to the second wave of Covid-19, the construction sector had started witnessing strong recovery and pace of execution had crossed the pre-Covid levels as reflected in the construction GVA growth of 6.2% in Q3 FY2021, and estimated growth of 8.4% in Q4 FY2021.

          Due to this recovery, the construction GVA for FY21 is expected to contract by only 10.3%, despite a sharp 29.1% contraction in H1-FY21.

          The recent sharp spike in the covid-19 cases does increase the risk of restrictions on construction activities at the localised level and curtail labour availability at project sites, which could cause short-term disruptions in construction activities.

          Recently, Delhi and Maharashtra have announced lockdowns of 1-2 weeks, while many other states have announced weekend lockdown/restrictions, which would impact the movement of labour and raw material. If the situation deteriorates, other states could also impose lockdowns in the near term.

          However, unlike earlier lockdowns, relaxations have been given to certain activities. Further, construction activities are permitted at sites where labour is available, though transportation of labour is not permitted.

          ICRA expects such a disruption to be limited and short-tenured.

          Further, given that the sector had faced a more intense effect during the first wave, most companies have improved their preparedness in terms of labour and raw-material availability.

          Companies which are focused on construction of real estate projects would witness a higher impact, given that most of these projects will be in metro/large cities where the risk of labour migration and localised lockdown could constraint their execution.












          Covid-19 impact on real estate: Covid's second wave unlikely to materially impact large construction companies, Real Estate News, ET RealEstate (indiatimes.com)
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          • Re : How will Coronavirus COVID-19 outbreak effect or impact Real Estate in India

            Real estate sector hit as Covid disrupts housing sales, project launches

            India Today Web Desk 7 hours ago

            Economic activity in many states has been hit hard due to the second wave of Covid-19 in India and some important sectors have started facing losses due to the prevailing situation. Real estate is one such sector that has been affected.

            For a sector that staged an impressive recovery after the coronavirus pandemic in 2020, the second wave came as a rude shock. There has been a dip in property sales, new project launches and commercial rentals since last month due to semi-lockdowns and other localised curbs imposed by states to contain the virus spread.

            According to reports, homebuyers have become cautious in view of the Covid situation and avoiding any property site visits even if they are interested in buying a home. A number of transactions have also been put on hold as consumers are now opting to reduce spending on non-essential items including homes.

            Real estate activity has suffered in key cities like Mumbai, Delhi, Bengaluru and others. For instance, the Mumbai Metropolitan Region (MMR) in Maharashtra has witnessed a drop in property registrations.

            A recent report by Anarock Property Consultants indicates that the second Covid-19 wave coupled with the expiry of the stamp duty cut period impacted the monthly growth momentum of Mumbai's housing sector.

            In Delhi, where a sharp surge in Covid-19 cases has brought economic activity to a standstill, the real estate developers are struggling as well.

            Many experts suggest that the demand for housing sales, especially the luxury segment, has witnessed a dip in April 21. While most developers suggest that the situation will not be as bad as April 2020, they are worried that the sector will take a big hit if the Covid-19 situation does not come under control soon.


            COVID DISRUPTS HOUSING RECOVERY


            The second wave came as a shock for many real estate developers, who are struggling on all fronts since April. While homebuyers have reduced drastically, a shortage of labour has led to delay in project completions. This could led to additional cost factors for real estate firms.

            Prashant Thakur, Director & Head Research, ANAROCK Property Consultants recently said that the April-June quarter will "certainly be impacted" by the rapid spread of the virus. Other property consultants seem to agree, but add that it is too early to say if the impact will be widespread like last year.

            The managing director of a real estate consultant firm quoted in a livemint.com report said home sales may dip 25-30 per cent drop during the April-June quarter.

            It may be noted the impact of the second wave has mostly impacted sales in the luxury and high-value segment. In contrast, the affordable segment — costing up to Rs 45 lakh — has been upbeat; it is one of the reasons that has kept the Indian real estate afloat, according to a ************** report.

            Mani Rangarajan, Group COO, Housing.com, *********** and **************, suggested that housing sales had almost reached pre-Covid level in January-March, driven mainly by low-interest home loans and stamp duty cut by the Maharashtra government.

            However, Rangarajan feels that the recent outbreak of the second wave of Covid and semi-lockdown in many states may "put a brake on the revival of the housing demand seen during the last nine months".

            "Though It is too early to assess the impact, we need to keep in mind that the real estate industry is more prepared this time to handle the situation. The sector has taken a giant leap in the adoption of digital tools for marketing and sales during the last year," he observed.

            Many developers have started delaying new project launches as they expect sales momentum to suffer in the wake of the Covid-19 pandemic. While they plan to resume launches in the second half of the year, a lot will depend on how the country manages to tackle the second wave.












            Real estate sector hit as Covid disrupts housing sales, project launches (msn.com)
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