How To Cope With The Crisis?
The real estate industry is one the largest employment generators, both direct and indirect, of the country and contributes significantly towards the national GDP. 2019 has been a mixed bag for the industry in general with demand moving southwards and increase in inventory.
With the unprecedented COVID -19 menace and locking down of the country, it’s a challenging time for the real estate construction activities. All its stakeholders including the real estate developers and the home buyers are in a fix as to what should be the next move. This is mostly due to the unavailability of the construction workforce as well as supply constraints for raw materials required. It is being estimated that the residential demand will be slow, post the lockdown.
However, things are not as morbid as it looks apparently. The extension of the filing date of tax returns with extended facilities till 30th June 2020 means home buyers will have incentive to avail the tax saving benefits on account of home loans. This gives ample scope for developers to lure the customers with additional incentives. It is highly expected that the interest rates on home loans are also going to move down.
The real estate developers have already moved into online selling with lucrative ‘advance online offers’ to lure in customers. Digital platform is going to play an important role in this regard. Strategically, optimisation through collaborations can also be an alternative for revival. Businesses need to be more flexible, agile and responsive to the changes that would crop up.
The reduction in Government registry rates and probable reduction in interest on home loans are also bound to provide the necessary boost to the real estate sector to revive. Further, ‘recovery packages’ from the policymakers will be catalysts for the sector to return to pre COVID levels again. Relaxation of project delay norms for RERA compliant projects will help the industry to recuperate. It is also expected that the government will also look into the ways and means to reduce financial stress on this sector. As ease in NPA classification rule may also be looked into.
To conclude, the COVID crisis has remarkably pointed out the importance of owning a home to ‘Stay Home’ rather than a rented one and it is expected that people will understand the necessity and make a move in purchasing their own homes in the coming days.
By Abhishek Bhardwaj,
Chief Marketing Officer,
Shristi Infrastructure Development Corporation Ltd