Real estate is puzzled amid COVID second wave
From May 1, 2021 Residents between the ages of 18 to 45 are eligible to get the COVID-19 vaccine as part of the pandemic’s second wave vaccination campaign. Over 200,000 cases of COVID-19 were reported in India in the previous month.
The vaccination campaign is already underway. If the campaign goes successfully, threats to the recovery may be reduced, and economic activity in the second half of 2021 will likely go up. The broad reach of vaccines will improve management and increase construction activity, which will benefit the realtors.
The realtor community is optimistic while being cautious. Since the Coronavirus-induced lockdown was lifted, the real estate business has gradually recovered. People have realized the benefits of owning a home after the first lockdown period in April/May 2020; hence the second wave of COVID-19 can have little impact on the industry.
Although the second wave is unexpected to result in a significant decline in real estate prices, there will be some issue in repercussions. The reason would not be the result of COVID-19, but rather as a result of the restrictions put on the general public’s movements and the delayed supply of other support services, such as processing documents for applying for house loans, getting the agreement for sale or flats registering, or contacting sales and marketing professionals for more information about the project.
The vaccine campaign provides some hope, but the real estate market is anticipated to have a challenging year in 2021, if not a complete washout.
The government’s next phase of Covid-19 vaccination, which is aimed at residents between the ages of 18 to 45, will boost construction conversation by assisting labourers in getting vaccinated as soon as possible. The vaccine campaign is expected to be accelerated, even more, reducing the risk factor. It would also solve the issue of reverse migration, as the workers will feel safe after being vaccinated.
As per government rules, antigen testing is required for all migrant workers until they are vaccinated. Labourers are the most essential and integral component of the real estate development process, and the government must take the best care of them.
Large scale developers may not be concerned about the current situation, but smaller developers are. While the big players are already taking the required safeguards on the ground, small developers and redevelopment projects may not have adequate room for such safeguards.
The Union Government’s vaccination campaign believed that the year 2021 would be a year of recovery. However, the recent rise in Maharashtra and many parts of India has prompted the investor community to exercise caution.
One of the significant obstacles in expanding the real estate sector has been the lack of Finance. Financial institutions have been forced to avoid riskier investments due to the uncertain environment as the recent revival of the pandemic has worsened. This could add to the real estate sector’s already dire financial situation.
While this may be the beginning of a full-fledged, slow-but-steady recovery, it will depend on how well Asia’s third-largest economy manages the difficult task of getting the vaccine available to its enormous population despite supply-side issues given its poor health and transportation facilities. It will also have an impact on the overall economic recovery scenario, which will shape the future of India’s residential real estate industry.
India’s economy is expected to decrease by 9.6% in FY 2021, according to the World Bank’s Global Economic Prospects, due to a sharp fall in consumer expenditure and private investment. Growth is predicted to return to 5.4 per cent in 2021. According to the International Monetary Fund, India’s economy will fall by 10.3 per cent in FY 2021 before expanding by 8.8 per cent in the following year.