Impact of coronavirus on the industry
By Amit Khanna, Design Principal, AKDA As the inevitable spread of the Coronavirus starts being experienced in India, it is relevant to examine the short term and long term impact that Covid19 will have on the real estate industry. Serious disruptions are expected on the supply side as construction sites are shut down and workers head back to their rural households. This disruption is also expected on the manufacturing end, as plants are shut down and inventories pile up. On the demand side, an uptake in transactions is expected, as people reprioritize their investment strategies towards more robust assets, following a rout in the equities market. This uptake may not necessarily mean an increase in prices, as sentiment will continue to remain deflated. Overall, the sentiment is expected to be increasingly pessimistic as the pace of projects slows even further. At this time, it is important that the government steps in with a significant fiscal stimulus, either by way of infrastructure spending or by reducing the tax burden on transactions in the industry. This reduction should be both on the B2B transaction side and to allow for greater liquidity. It is expected that the Coronavirus will have a negative impact for the next two quarters on the real estate industry, unless the government takes immediate easing measures.
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