It is a truth universally acknowledged that a single kind of virus resulting in a pandemic must lead to the already turbulent reality sector taking a dip. However little known its effect on the nation-wide lockdown may be, the truth is fixed so well in the minds of consumers that it is not considered as the ideal period to invest in real estate for the months ahead, however ideal the property may be.
(opening inspired by Jane Austen’s Pride and Prejudice)
The Indian real estate sector, after struggling to rise back up post the policy reforms, structural changes, and liquidity crisis since 2016, welcomed another fallout in 2020. Although the slew of reforms and changes put the sector in an uncomfortable position to grow, demonetisation, GST, RERA, IBC, and subvention scheme ban only resulted in bringing transparency, accountability, and the much-needed fiscal discipline in the real estate businesses. Despite demonetisation in 2016, real estate contributed to nearly 6% to India’s GDP in 2017 and it was anticipated pre-COVID 19 that the sector’s contribution was likely to rise to 13% of India’s GDP by 2025.
Normally, this ongoing period sees a rise in property sales largely in the residential space thanks to festivals like Ugadi, Gudi Padwa, Akshaya Tritiya, and Navaratri. Unfortunately in 2020, construction activities have been stalled due to the lockdown which led to postponing of project launches, hence resulting in a fall in sales- largely due to the fear of psychosis and poor consumer sentiments. As per ANAROCK Research, residential PE investments’ share of the overall inflows declined from 53% in 2015 to a mere 8% in 2019.
Besides residential, commercial and retail are also badly affected. With most companies testing waters of the work from home system, leasing activities are anticipated to take a big hit. Retail businesses highly depend on consumer spending. Hence, they are also witnessing a momentary slowdown and reduced interest from global brands who may now consider revising or reducing their brick and mortar stores. According to a report by Anarock, “Considering the possibility of further decline in consumer spending, social distancing being the new norm, possible delays in new leasing activity, and the dearth of skilled and unskilled labour to complete projects, the planned new completions across the top 7 cities might drop to between 30%-50% overall in 2020 as there may be a minimal activity in H1 2020 and the subsequent second half may also remain fairly muted. Also, new mall additions in tier II cities may be relooked by developers and investors as there will emerge investment or acquisition opportunities in the tier I cities itself due to the unprecedented crisis that has hit the Indian retail sector”.
The sector highly anticipates vacancies to shoot up and the industry’s overall growth rate to slow down.
Some key points for Communication in the Real Estate sector to focus on could be:
Although some companies are doing their level best to keep the ball rolling, the sector is going through a transformation phase and once it is over, the real estate sector would have transitioned to a smarter era and emerged stronger than ever.
– Udita Mehta
Udita Mehta is a part of Class of 2020 of PG Programme in PR and Corporate Communications at SCoRe, Mumbai. She completed her winter internship with Avian WE
Udita pursued her B.A in Journalism from MOP Vaishnav College for Women, Chennai. She is an ardent storydweller and a budding storyteller. Public Relations to her is a people-centric business and she enjoys being on a mass communication front. She is an avid reader, a film buff, a foodie, and a chai lover. She is passionate about environmental issues, especially water conservation.