Covid disrupts Housing Sales, Project Launches
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.
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. 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.
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.
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 propTiger.com report.
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.