COVID-19 has affected every sector directly or indirectly and the stagnant economy is doing no better when the state is struggling with a health crisis and people are under constant threat from coronavirus.
Along with the transportation and hospitality sectors, the Real Estate sector has also faced a huge slump in demand, resulting in a drop in prices. Customers are deferring buying new properties during the pandemic which has added numbers in the worth of unsold inventory totaling to Rs.370,000 crores. The number of units in unsold inventory increased from 4,42,228 units in Q4 2019 to 4,55,351 units in Q1 2020. The period to liquidate money from frozen assets increased from 3.2 years to 3.3 years.
However, the residential real estate market appears to be at an advantageous position today as compared to the global financial crisis, led by a series of structural reforms by the government in the past five-to-six years.Ramesh Nair, CEO & Country Head, JLL India
It is anticipated that the price reduction of properties due to relaxation in loan rates will result in the upliftment of the Real Estate sector post COVID-19 crisis. But the Real Estate sector’s recovery will largely depend on the spread, intensity, and duration of Coronavirus. Government intervention with stimulus measures and Monetary Policy adjustment by RBI may save the real estate sector from draining into a financial crisis and bankruptcy. Since mostly all the sectors are affected, it will take some time to restore the equilibrium in the real estate sector and its sales.