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What Covid-19 means to realestate and everything else in India

Industry persons express their views ofthe Covid-19 effect on real estate andother aspects of life

26 Mar 2020

The Corona virus has unleashed unprecedented terroracross the world. While the world is still grappling withthe situation, the lockdown in India is only adding tothe woes of the industry. Of course, there is no choice.But, meanwhile, some of our Indian industry headsinterpret in their own way the near future.

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Niranjan Hiranandani, president (national) NAREDCO;president, ASSOCHAM: In the Indian scenario, we lookupon festivals as auspicious times to make a newbeginning. For real estate, Gudi Padwa is traditionally,the day when all new beginnings – be it booking anew home or moving into a new home – areconsidered to be done on an auspicious note. Thisyear, things are a bit different, with the Corona Viruspandemic impacting all sectors of the economy.

The ‘challenging scenario’ is something real estate hasbeen dealing with since the economic and policyreforms were introduced; the impact of what I call the‘tsunamis’ – demonetisation through RERA and GST,among others – was major. Buyer confidencereduced, sentiments were impacted and salesdropped to low figures. Add to this the credit squeezeand last mile funding challenge, not to forget the NBFCcrisis, ILFS and DHFL. Result: troubles compounded.

Dhruv Agarwala, group CEO, Housing.com,Makaan.com and PropTiger.com: While necessary, thevirtual lock-down in major cities across India, due tothe recent corona virus outbreak, will certainly havean adverse impact on economic activity acrosssectors including real estate. We too have begun tosee a dip in traffic on all our platforms. In order tomitigate the impact, we have come out with variousinnovative schemes for builders and brokers to

encourage them to continue to advertise onHousing.com so that they can build their customerpipelines even when the market is slow. We have alsolaunched video calls, virtual walkthroughs and otherinnovative visualisation products to enable consumersto make property purchase decisions in the comfortof their living rooms, while they are unable to ventureout of their homes.

Manoj Gaur, MD, Gaurs Group & chairman, affordablehousing committee, CREDAI (national): The sales areimpacted, but it is temporary phenomena. We willknow the exact impact only when things calm down.In any case second half of March and April aregenerally not great from sales perspective. Also, at themoment it is more important that people remain safe& healthy and that remains our prime concern as ofnow.

Nayan Raheja, executive director, Raheja Developers:The pandemic has adversely impacted all the sectorsof the economy including real estate. Sales andconstruction are badly impacted and at standstill asper govt orders. This situation may remain same tilllockdown is in effect but will have lasting effect oneconomy as project deliveries shall be delayed.However, since real estate is the only long term andstable investment asset compared to the other

volatile options, we anticipate a steady investmentgrowth once things get back to normal.

Amit Modi, president elect, CREDAI Western UP anddirector ABA Corp: As a near short term impact, thesales velocity has definitely been slow and the realimpact on the buying behaviour is visible due toCOVID-19 lockdowns in addition we also foresee adelay of around seven to eight months in projectcompletion on account of supply disruptions due tothe coronavirus outbreak and the National GreenTribunal ban on construction last year across theregion.

Mohit Goel, CEO, Omaxe: Both real estate sales andrecoveries have been halted as a result of thelockdown arising out of the coronavirus pandemic.Standing in solidarity and support, we have relaxedthe payments to be made by our customers and alsowaived the interest on those payments during thelockdown period. As for real estate prices, there will beno change as transactions are not taking place. Theprices will resume at the level it has halted.

Deepak Kapoor, director, Gulshan Homz: People aredeferring property buying decisions and accordingly,sales in March is likely to dip for sure. But as the fall inthe sector is nowhere compared to other assetclasses like equity, gold etc, we hope real estate will

again emerge as the preferred destination for bothinvestors and end-users.

Vikas Jain, CEO of Labdhi Lifestyle and managingcommittee member, CREDAI MCHI Raigad: Thecoronavirus has affected the real estate sector veryprominently. During auspicious festivals likeGudipadwa, and Baisakhi we usually see an uptick inthe market, which is missing. The housing sales will beimpacted adversely due to COVID-19. Last year, thefestive season was affected due to extreme monsoonand now the sector is facing the challenge ofcoronavirus. Also, prices of steel and otherconstruction material has a direct bearing on realestate industry as India is a big importer of steel andiron products, technical construction equipment aswell as plastic and fiber elements from China. Withproduction in China going down, the prices of thesematerials are bound to increase, resulting in increasingthe costs and reducing the profit margins of realestate developers in India. Moreover, the ‘work-from-home’ policy does not apply to the real estate andconstruction industry, many projects will be delayed ifthe situation in India worsens.

Shailesh Puranik, MD, Puranik Builders: The governmentis successful in battling two wars simultaneously, whileit is taking all possible steps to break Covid-19contamination chain, on the other hand, it has

ensured taxpayers and companies do not facehardships due to the challenges that have emerged.We welcome relaxation and deadline extensions. Wehope, the government announces similar measures torelax repayment towards mortgages, home loan EMIsapart from coming up with Income Tax and GSTholiday for the affected financial years.

Ram Naik, executive director, The Guardians RealEstate Advisory: Real Estate as a category thrives oncustomer footfalls at the project site for successfulclosure of transactions. With the outbreak, sites havebeen shut to prevent gatherings of customers andchannel partners. The affordable and mid-incomehousing segment, will also be hugely impacted as it’ssuccess depends on large gatherings and higherfootfalls. Some of the much awaited, project launcheshave been postponed for now. The scenario is equallygrim for the ongoing projects, as real estate expects todo well in the last month of the financial year, March,as a result of buying to avoid capital gain tax andasset purchases on the auspicious day of GudiPadwa. The lockdown could result in a Y-o-Y set backof anywhere between 11-14%.

Subodh Runwal, director, Runwal Group: Weappreciate the Government's measures in curbing thisdeadly pandemic. As a responsible corporate, RunwalGroup too have taken utmost care and precautions

and are also adhering to Government's initiatives. Allour employees have shown 100% solidarity with self-governance and are working from home. We havetaken an important step to sanitize all ourconstruction sites for the safety of our workers andhave stopped all the work till further notice. We havepostponed our Gudi Padwa launch and all ourcampaigns too. All our site offices will also remainclosed. We will have to together support ourGovernment in this time of distress.

Kaushal Agarwal, chairman, The Guardians Real EstateAdvisory: Real estate, as a community, has alwaysdone its bit to contribute to the society in more waysthan one. A lot of developers had very willingly &independently, much before the government restrictedpublic gatherings, postponed their project launchesand cancelled channel partner meets in the interest ofthe society. Majority of the Sales Offices have beenshut down to avoid contact between the customersand sales personnel. A sizeable part of theconstruction staff has also been asked to stay home.We at, The Guardians Real Estate Advisory, put thewell being of our employees before our businessinterests, and had therefore asked all our employeesto work from home starting 17th of March 2020.Moreover, we are also, regularly briefing them onpreventive measures to be taken while they are athome.

Bhasker Jain, head – sales, marketing & CRM at TheWadhwa Group: The Corona outbreak may havehalted the on-ground project operations; it hasimpacted sales too in short term to a certain extent.We have a business continuity plan and necessaryproject finance in place. Our design philosophybacked by strong execution capability has helped usto meet customers' obligations and generate furtherinterest digitally. On the occasion of Gudi Padwa wehave opened the option of online buying wherefamilies staying back home can interact with our teamthrough our virtual platform and chalk out their plansof finalising a property of their choice from ourbouquet of offerings; they can also avail cashback onbooking properties online. Our virtual site tours areappreciated by the customers and we feel thatreputed developers like us will have an edge inretaining and adding into sales pipelines. Although thesales numbers may not see an instant spurt thisfestive season but we are expecting around 30%sales through our digital virtual platform on theoccasion of Gudi Padwa.

Rahul Grover, CEO, Sai Estate Consultants Chembur:With the number of enquiries dramatically slowingdown, the real estate industry is facing the turbulenteffects of COVID- 19; the pandemic has not onlycreated a health emergency but a financialemergency too. The global economic slowdown is

pushing an already battered segment and negativelyimpacting the residential real estate demand, resultingin a massive reduction in site visits and enquiriesultimately leading to delayed decision making anddeal signings. As new home brings an added liabilityand the burden of long term EMIs, home buyersbelonging to the working class, will be reluctant tomake any new purchases due to the uncertaintytoward their jobs, resulting in an even lowerconsumption of the affordable segment. Thepandemic has hit at a very sensitive period, that ofthe financial year closing, which remains extremelycrucial for most businesses. This year’s festiveoccasion of Gudi Padwa will also see a major drop inhome buying, and delay in launches due to acomplete halt in construction activities. We believe acredit liquidity boost in the sector post COVID – 19, willhelp the struggling industry to pick up pace. Howeverwe are confident that these are temporarydisruptions and the condition would definitelyimprove, and will not hold back the economy and theindustry for a long time.

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