New normal for real estate after Lockdown Coronavirus
What should real estate developers do after the COVID-19 pandemic, to survive the challenges? We get an opinion from an expert.
Just as the Coronavirus (COVID-19) has disrupted ‘normal’ life for people around the globe, property prices in navi mumbai so it has annihilated the ‘normal’ way of doing business altogether too. Business power lunches, customer meet and greet, brainstorming of the office, conferences and even the casual banter near the water-cooler are no longer there.
Economic and real estate impact of lockdown
The economy has taken on a big hit and almost all businesses are now feeling the effects of the lockout. Most companies are highly unlikely to move beyond what they have in the hand unless there is a global and domestic off-take, and governments around the world are starting to push the rise. In the immediate short-term, real estate, which is the country’s second-largest employer, has suffered greatly. Kharghar property rates both, commercial real estate rentals and residential inventory sales, have taken a dive. If the government steps in and takes appropriate measures to infuse a new life into the industry, the only path to recovery that seems feasible. This indeed holds true for most of the country’s industries.
Is it because of Coronavirus that property prices will fall?
When it comes to sales, real estate must also face the misunderstanding in the minds of the majority of prospective buyers that price cuts will occur. Over the past few years, a number of major policy changes have occurred in the realty market, which has strengthened the industry but has resulted in reduced margins for developers. The situation facing developers is that while the prices of real estate are the same, the costs have gone up considerably. Costs of land, labor, raw materials, and even governmental approvals, are high. Prospective buyers should not hang on to the idea that, as a result of the lockout, property prices would drop dramatically.
The real estate sector’s sustainability would depend on the developers’ capacity to produce cash flows. That is the only way to solve the challenges that emerge as a result of this pandemic’s lockdown process. In addition, all businesses, not just real estate, will need to focus on cost optimization, which can be achieved through investment in automation and digitization. Businesses in a post-COVID-19 environment must follow the mantras of simplification of operations, efficient use of capital, and digitization. There’s a silver lining, as business gurus expect that after the global pandemic India is better positioned to become a development center. This could bring back interest in groups of commercial and retail properties, too.
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