The deadly virus had given a harsh blow to the realty sector in its first wave. It shook the roots of the realty sector. Due to its resilient nature, the sector bounced back again and was just trying to dust out the fall, when it was struck again by the second wave. As the realty sector had learnt a lot from the previous blow, the second wave may just nudge it without causing much harm.
TABLE OF CONTENT
1. Second Wave Nudges the Realty Sector
2.Fear of Exodus
3.How can the Sector Come out Smoothly
4.Formats that May Dominate In spite of the Nudge
5.Closing Words
1.Second Wave Nudges The Realty Sector
The vast and sturdy real estate had shown an impressive recovery after the pandemic brought distraught in the world in 2020. The country is again hit by the second wave which proved to be more deadly than the first one but the realty sector was ready with the precautions, hence the second wave could only nudge the sector and couldn’t create much havoc. There had been a slight dip in property sales, the launch of new projects and even the commercial sector. The Realty sector of Hyderabad has witnessed not much loss as compared to the other states.
2.Fear Of Exodus
Just when the green shoots began to peep in the realty sector, the country was hit again by the second wave of pandemic. This wave again disrupted the construction activity at the sites as some of the migrant workers began returning to their hometowns as soon as the restrictions and partial lockdown were announced. Though it was not a mass exodus, most of the sites were left with half of the force to carry on the work at the site. Though not many have migrated in this second wave, some had not returned after the Holi festivities and some were afraid of the growing number of Covid cases in cities, thus stayed back at their places. States began convincing the workers who were away from their homes to stay where they are. They were assured of getting vaccinated in the coming days and also that they will not lose their livelihood. These movements have given a nudge to the sector but this blow was not as severe as the previous one. The construction sites have to do with roughly half of the strength but the show went on.
3.How Can The Sector Come Out Smoothly
Covid 19 has caused a lot of disruption in both the waves. The government had supported the realty sector during the first lockdown and pulled out the sector from shattering. Various measures were taken by the government like – The Repo rate was cut down, home loan rates were reduced, Covid 19 was declared as Force Majeure – an unforeseen circumstance that prevents someone from fulfilling a contract etc. These measures reduced the stress of the sector in the first wave and gave it some relief. But no such provision is so far declared in the second wave of the pandemic. The sector expects some relaxation in stamp duty and ease of GST rate to encourage the home buyers and investors of real estate. Workers and labourers are the backbone of construction and this backbone has to be safeguarded by getting them vaccinated on a priority basis. Moreover if any worker contacts the virus and is declared Covid positive, then he should be given medical leave and those who come in contact with this covid positive should be quarantined but with full pay. With all these expectations and precautions falling in proper place, the realty sector can smoothly come out of this second wave.
4.Formats That May Dominate In Spite Of The Nudge
In spite of the nudge given by the second wave, affordable and mid segments are expected to dominate in the coming period. Luxurious projects are limited in numbers as the developers are very cautious with these. People are going for ‘the bigger, the better’ concept but at affordable rates. Due to work from home and study from home, families need more space. ‘Close to or in the city’ is not the choice of many. The tables have turned due to the pandemic. People prefer to move away from the city to the suburbs in search of affordable and spacious houses. The size of the apartments is witnessing an increase. A bigger house is expected at affordable prices.
5.Closing Words
The realty sector began to decline as soon as the first lockdown was imposed and faced a roller coaster ride throughout the lockdown. The mass exodus of migrant workers, shortage of raw material and various other factors didn’t allow the sector to see the rays of recovery. Later, the sector bounced back in a few months, at a faster pace in Hyderabad. With the beginning of the second wave, the sales began to witness a dip again. As compared to other states, Hyderabad’s real estate kept itself afloat even in the second wave. At most of the sites the migrant workers are not leaving for their hometowns during partial lockdowns because the builders have taken up the responsibility of providing necessary help to all their workers who stay back on the site and don’t return to their hometown during the second wave. The relaxations and the partial lockdowns gave a chance to continue work at the sites; hence most of the construction activities remained functional, preventing the exodus of the migrant workers during the second wave.
This devastating pandemic has been destroying families, business, economy etc. but on the other hand it has also preached a few values and lessons. It has led to growing realization among people to have their own houses. Home ownership is becoming the top priority amid pandemic. While the second wave has just given a nudge to the realty sector, it acted to bridge the demand –supply gap .Though the second wave has slowed down the recovery process, real estate like before will show resilience and would witness a faster recovery with the help of technology in the second half of 2021. Therefore the previous unsold inventory will sell relatively faster. With the launch of new projects the balance of demand supply is expected to surge in the last two quarters of 2021. Second wave may nudge the realty sector but cannot bring it to its knees due to its resilient nature.
Written by,
Nikhil Gattu.
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