Many are anticipated that the market could recover completely in 2021, given that enquiries, site visits and sales had started between Feb 2021 to April First week of 2021. However, the Coronavirus second wave started from March last week and went into the peak stage of last week of April 2021 and sparked fears far worse than the last year. With several cities like Mumbai, Pune, Delhi, Karnataka, Andhra Pradesh are undergoing partial lockdowns, and masses struggling for healthcare, the realty sector has seen another blow. Investors or Buyers have retracted once again from conducting site visits, thus slowing down property transactions. When will real estate recover completely depend on the way India deals with the second wave of Coronavirus and based on the processing of vaccination to the people.
The customers are afraid to visit the sites and also they are in a confused state to invest money on their First homes or second homes.
The Hyderabad real estate was not affected much during the first pandemic time, in spite price increased 5 % compared to other cities in India. So similarly the price may increase after pandemic2 over may be after July. There are a couple of new projects started during Feb2021 to March 2021 those were halted now 90 % due to labour not available,, labour illness, corona symptoms, material availability problem due to lock down. This is a short time effect only. After 3 months i.e. from July or August, again Real Estate may be sped up and many more new projects are ready to Launch as per analysis.
This is a good time to invest because once pandemic2 over there are a chance to increase in price due to labour charges increased, material cost increased etc. This will automatically effect on price increases in Housing projects but may not effect on open plots cost.
So its good time for investors to buy property now.
Impact of COVID on Housing Construction and property prices
Since the Coronavirus-induced lockdown was lifted, the real estate industry has witnessed a gradual recovery. The second wave of COVID-19 would have little effect on the industry because after the first lockdown stage in April/May 2020, people realised the value of owning a home for themselves.
At present the housing construction process is delayed due to labour illness, covid symptoms, labour not availability, material supply delayed and etc. This is an effect major on small developers because those preojects may not have enough space for labour camps but where as the current scenario might not be a concern for the large and medium sized developers because they are taking utmost care of their workers. While a few of them are providing shelter and food to their workers, some are also sponsoring their Antigen and RTPCR tests, along with other medication and healthcare costs. Developers are also keen on sponsoring the vaccination of their labours on priority.
After the record spike in COVID-19 cases, the next phase of vaccination to those above 18 years of age is a great move by the Government. It will boost the construction activities as it will help the labours to get vaccinated at the earliest. It will also address the issue of reverse migration as after vaccination, the labours will feel safe.”
According to a report by the property brokerage firm, the weighted average prices of properties, in leading markets like NCR and Mumbai showed flat growth in the October-December period of 2020, when compared to the levels seen in the same period in 2019.
Interestingly, no prime market showed any downward movement in prices during the one-year period, in spite of the severe pressure caused on growth, because of the pandemic. In what could be termed as significant at this point of time, the average rate of new housing projects in Ahmedabad and Hyderabad, in fact, registered positive growth of 7% and 5%, respectively. Pune, too, recorded a positive price growth of 4% in the past one-year period.
We do not expect a drastic drop in real estate prices as a result of the second wave, but there will be some domino effects. Not directly because of COVID-19, but because of the below related constraints:
a) General public’s movements,
b)Delayed delivery of other support facilities, such as processing papers for applying for home loans, having the agreement for sale or flats registered, or reaching out to sales and marketing personnel to garner more information about the project.”
Despite a positive hope due to the vaccination drive, the year 2021 is expected to remain challenging for the real estate sector, if not a complete washout.
Impact of COVID on Ventures/Open Plots and prices
Covid19 second wave is also affecting the Ventures or Open plots sales but less compared to Housing properties. Because labour or material required for Ventures development are less compared to Housing projects.
But customers are afraid to visit sites due to corona second wave in peek stage this is affecting open plots sales and also customers are in dilemma to invest money due to the present situation.
Once vaccination drive for 18 to 45 people will be done and the second wave will be under control then RealEstate will be pick up. Compared to Housing projects ventures business will recover quickly and sales will be High.
Open plots cost is steady now but may increase quickly once Covid second wave will be under control. We saw that Sales was good in the period of Jan 2021 to March 2021 and also open plots cost increased to 5% during this time, similarly cost may increase for the open plots once vaccination will be done and second wave will be under control.
So this is good time to investors to buy an Open Plot.