Impact of Covid on Builders/ Developers in South Delhi
Life is certainly going to change when we reach the other side of the COVID 19. The virus will change the functioning of developers, buyers, and key stakeholders of the real estate industry. The impact of corona virus on South Delhi Builders will be far-reaching ranging from affecting their supply chains to finding the buyers for their luxury properties. Sale of South Delhi homes & apartments will pause (stall) for at least the next few months as buyer’s priority will shift to health and income protection to face unpredictable economic landscape.
However, in the long run, we expect investments in quality of life living and self-indulgences. Thus, on the positive side, we should see an increase in demand for bigger South Delhi homes.
- Buyers can look at, self sufficient and integrated posh colonies like VasantVihar–Shanti Niketan, Greater Kailash–Pamposh Enclave, Green Park–Safdurjung Enclave, Defence Colony, South Extension, Jorbagh–Golf Links Areas.
Southdelhiprime.com envisions a paradigm shift from smaller livable spaces to bigger!
Let’s try to understand the obstacles that Builders and Developers could encounter in the After Corona (AC) environment:
Impact on supply chain
Most of the Builders and Developers in South Delhi depend on China’s import for its raw material needs like iron & steel, construction & electronic equipment, solar panel & fittings. China being an epicenter of coronavirus, many of its manufacturing has been put on hold or is delayed. With reduced supply, prices are expected to go up, thereby increasing the cost for Builders and Developers in South Delhi hampering their profit margins and delay in delivery of their luxury South Delhi homes & apartments.
Though many of the items can be provided by Indian manufacturers but cost competitiveness is difficult to match leading to many developers delaying their delivery of South Delhi floors and apartments completion & possession dates.
Halt in construction activity
With lockdown been announced In India since last month, there is a halt in construction activity. Most of the workers have migrated to their hometowns and in current uncertainty with fear of corona rising, they are not expected to return to work soon.This will eventually lead to delay in on-going projects and new launches will subsequently be postponed. Some of the top builders in South Delhi have provided for meals for the labour at the construction site.
Southdelhiprime.com advice for all Builders & Developers in South Delhi is to:
- Look at alternative sourcing of raw material to ensure smooth flow of supply chain for the South Delhi homes & apartments.
- Explore alternative products that can be availed from other markets keeping in mind the quality standards of luxury homes in posh colonies of South Delhi and getting clients approval for the same
- Pay special attention to all the supply agreements in the future with your rights being clearly defined in case of delay in the supply of goods
- Keep your clients aware of all the current development in the ongoing construction of their luxury homes in posh colonies of South Delhi caused by non-supply of products to maintain their faith in times of uncertain environment like current Covid situation.
- Ensure you submit a claim for an extension of time for project completion within the timeframes given in the contract.
- For any future contracts, always incorporate any expected delays and ensure that your quotes also address these potential issues.
- Review your contract for ‘force majeure’ clause
- Provide all necessary support to workers, from undertaking precautionary measures like providing sanitizers, face masks, medical assistance, and fumigating the construction sites and labor camps located in posh colonies of South Delhi.
- Post-COVID 19, buyers will prefer the house in self-sufficient posh colonies like VasantVihar–Shanti Niketan, Greater Kailash–Pamposh Enclave, Green Park–Safdurjung Enclave, Defence Colony, South Extension, Jorbagh–Golf Links Areas. with retails, entertainment, shopping all under one roof. Accordingly, Builders should plan their new projects.
- Good well located products with good quality constructions, clean documentation and from stable Builders will continue to sell.
Future Outlook for Demand of Homes & Apartments in South Delhi
- In current situation people will always expect for an uncertain Covid-like situation to reccur thus people living in South Delhi with ample resources would prefer a better & bigger homes & apartments for their family like a 300sq yards client would prefer to shift to 500sq yards home realising the need for bigger family space.
- Massive correction in stock market due to pandemic will instill a strong sense of trust in South Delhi Property market as the most safe and stable investment for a cash rich customer.
- Spent on luxury & recreational activities like international travels, dining outs will divert to real estate as:
- Restriction on travelling and dining will continue for few more months
- Sense of insecurity post Covid will make people realise investment in South Delhi Property as safest alternative
- Preference for luxury amenity equipped apartments like private lifts will rise. Demand for apartments / Condimeniums will come down due to concept of community living ( common lifts, central acs lobbies) clashing with the covid 19 protocols. Hence there would be reverse exodus of people preferring Builder Floors.
- Lockdown has increased the value of owning a home for families. Lower interest rates has given a further boost to it. Rise in enquiries are expected for Ready to move-in projects & homes located in self-sufficient integrated posh colonies likeVasantVihar–Shanti Niketan, Greater Kailash–Pamposh Enclave, Green Park–Safdurjung Enclave, Defence Colony, South Extension, Jorbagh–Golf Links Areas.
The most critical period for real estate is the next 1-2 quarters as even after realizing need for bigger homes, buyers will take few months to evaluate all their income streams and available financing options. Government can play a critical role to kick start the real estate industry by giving it a required push and boost.
Southdelhiprime.com a Digital Venture of SanD Advisory Pvt Ltd. is a boutique real estate advisory & transaction company, having advised the who’s who of South Delhi on their real estate assets. We have special expertise in high value transactions & dispositions in South & Central Delhi. With over 500+ clients, SanD has done transactions worth millions. DoctorProperty.in, our online expert will respond to some of the common questions we’re receiving regarding buying a house during this pandemic.
