Impact of COVID-19 on South Delhi Luxury Residential Market
Yes, Corona is real and is spreading like a fire!
Since first being identified in December last year in the Wuhan district of China, Coronavirus has spread to dozens of countries around the world. Global economy seems to be entering into a global recession with global powers like Italy, US being worst affected.
The pandemic outbreak is having a substantial impact on all the economy affecting all the industry from tourism to restaurant, from manufacturing to services.
Covid-19 has not spared the real industry as well. Everything from everyone from brokerage operations to how listings are being marketed & the ability to close the transactions is requiring realtors to adapt to the circumstances.
Let’s try to understand the impact of COVID-19 on real estate in India particularly in South Delhi luxury residential property market.
What will be the immediate impact due to preventive measures like lockdown taken by Govt. to promote social distancing?
- New Launches have been put on hold
- Dip in site visits
- Halt in construction activity
- Expected delay in on-going projects as laborers have migrated to their hometown
- Heavy dependence on imports (like Steel, machinery) from China will further postpone the completion of under construction projects
What can we expect for Indian real estate industry particularly South Delhi residential market post lockdown?
Residential Real Estate Market in South Delhi:
- As per Doctorproperty.in research team analysis, post opening up from the lockdown, the real estate property market will take at least 2-3 quarters to gain its momentum.
- Property prices are expected to stagnate in South Delhi as most sellers will not be motivated to sell and will wait for the market and the general sentiment to revive.
- Customer’s preference will shift towards buying of property from Bank FD’s, Mutual Funds, for investment purpose, triggered by low interest rates & growing uncertainty in the Banking sector.
- Home loan rates are already at their lowest level in last 16 years and they may even fall further.
- Under the GST regime ,Under-construction properties will lose their sheen due to uncertainty surrounding its completion.
- Stock markets will lose their appeal out of growing uncertainty over global economy and residential property buyers will find the property market more attractive with home loan rates at 7.25%
- New & near ready property with Completion Certificate will sell faster than older properties available for re-sale.
- Integrated self sufficient colonies Like Greater Kailash, Vasant Vihar, Defence Colony, Safdarjung Enclave, Saket and other colonies near to schools, hospitals and recreational facilities will see a rise in demand.
- With rupee being all time low against the dollar, NRI’s interest towards Indian property market can be expected to rise.
What will be the long-term impact of Covid-19 on Indian Real Estate Market?
Indian Real Estate market is expected to grow once this pandemic settles down owing to below reasoning:
- The whole world has lost its faith and trust in China. Focus of world economies will shift towards India as a more stable trading partner & the powerhouse of skilled manpower.
- Stock exchanges/ Gold will no longer be considered as a safe option for investment and investors will prefer investment in property market.
- Indian Government and Banks will infuse huge money in the market for economic revivals.
- India Inc. will benefit from this opportunity with Make in India & Start Up India getting a big push from Government.
- Eventually demand of commercial spaces will grow.
- Reverse migration from US & other countries will lead to an increase in demand for premium luxury residential homes/ apartments in South Delhi and other metros.
- Lockdown will make everyone desire a bigger living space, thus all the residents would look for better residential spaces. Demand will shift from 2BHK to 3/4 BHK, Flats to Villas & Villas to Farmhouses.
- Majority of NRI population is from Northern India thereby resulting in rise in demand of prime luxury residential homes, floors, houses in South Delhi, Punjab and other northern states.
This un-parallel demand is expected to create Indian real estate a lucrative market for investors as well as end users. However, Rentals will see temporary corrections in the Metro/ Urban cities in India.
Doctorproperty.in firmly believes there is a brighter future for Indian Real Estate market and we will be able to control the pandemic much sooner than later.
Till then, Stay Home, Stay Safe!Share this:
