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Real Estate Reinvention: Will 2020 Be A Watershed Year?
With workers now springing back, lower interest rates & rationalisation in terms of pricing, we are witnessing a surge in demand and shall continue to see so.
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The impact of the pandemic has been unprecedented on all sectors and real estate is no different. In the initial months of its outbreak, construction activities were at a hault and the market of its potential buyer-base was significantly eroded.
Albeit the real estate sector observing a fair share of ups and downs in the past, the nation-wide lockdown brought in an added challenge & stand-stilled the property transactions to near-zero. It cannot be denied that the sector witnessed the lowest of lows during these months. The interdependence of supply chains, migration of labourers, cost overruns, and liquidity constraints came to fore and emerged as some of the looming obstacles.
Nearly eights months in this situation, the sector is now picking up, with homebuyers now willing to shell out money out of their pockets.
In our conversation with Niranjan Hiranandani, MD, Hiranandani Developers Group & National President, Naredco & Assocham at the 16th edition of BW Businessworld Marketing Whitebook Summit 2020, he begins with explaining how the real estate remains to be an integral part of any economy, “Countries grappling with recession have been pulled out with the help of the real estate and infrastructure. No country has touched a double-digit growth without the real estate sector lending a hand to it in testing times. In fact, it is the second largest employer in India (about 15%), and hence affects a lot of people. Interestingly, real estate has a multiplier effect on nearly 269 allied industries (steel, cement, plumbing, electricals, marbles, tiles, fillings, etc.).”
Ever since India was hit by demonetisation, the sector has been on a bad break. The industry further went down, owing to the reverberations of the pandemic. However, Hiranandani now anticipates a positive story in the coming months. “With workers now springing back, lower interest rates & rationalisation in terms of pricing, we are witnessing a surge in demand and shall continue to see so,” he adds.
Talking of whether 2020 will be a watershed year for the sector, Hiranandani is all optimistic with the demand for quality housing coming back. As for the commercial side, it is expected to spring back by April 2021 too. “Real Estate will contribute to the economy from a -10% to +5% in the next financial year. 2020 has been a year of change & we all must adapt to this change. A few of the paradigm shifts that this year has netted include upgradation of housing and consumers looking for convenience, better facilities & ownerships instead of rentals,“ he opines.
Anshuman Magazine, Chairman & CEO, CBRE India, SEA & MEA is also unshakable in his belief that the Indian real estate market would recover faster than any other country, relatively. Ever since the lockdown has been lifted, there has been activity in all parts of the real estate industry. “India is not a saturated market as it has some fundamental strengths- availability of talent & low cost of this talent,” he adds.
Magazine also throws light on the growing popularity of proptech space. He expresses, “There has been an accelerated use of technology in our industry, with AI/VR being applied in various areas. With young people developing proptech ideas and applications, it eventually benefits our service to clients & expansion in market at large.”
Both the industry veterans are of the same opinion that the sword of corona still hangs on our head. With the cloud of uncertainty surrounding us, there’s still lot to be done. However, India is still in a better position as far as recovery is concerned and can anticipate a gain in momentum in the next 6-9 months.