The Corona Virus has spread to 73 countries, including India, and has affected more than 300,000+ people, and is making the global luxury real estate market Confusion.
In India, the overall impact on real estae will be limited unless the outbreak lasts long.
Indian realtors, however, are of the view that the virus may not have a major impact on the domestic real-estate market.
The impact may be restricted to high-end luxury real estate that relies heavily on import of fixtures and furniture from China. The outbreak of Corona virus in Wuhan, China, and a recent detection in Delhi-NCR has impacted the business sentiment severely. T
he Indian real estate industry would also be affected indirectly as allied businesses such as steel, heavy machinery and other raw materials are heavily dependent on Chinese import.
Developments are extremely fluid, and tremendous uncertainty remains regarding how broadly the virus will spread and what its ultimate impact will be on public health, economic growth and financial and real estate markets.
The rapid spread of COVID-19—more commonly referred to as corona virus or novel corona virus—has officially been declared a pandemic by the World Health Organization.
It’s already claimed more than 10,000+ lives. Major events and conferences are being postponed or cancelled, corporations are telling employees to work from home, and the stock market has dropped more than 15 percent since February 24.
Commercial real estate sector is not the stock market. It’s slower moving and the leasing fundamentals don’t swing wildly from day to day. If the virus has a sustained and material impact on the broader economy, it will have feed through impacts on property as well.
Central banks are responding aggressively. Odds are increasing that the Federal Open Market Committee will also vote to cut the federal funds rate.
Nearly a third of home building material inputs come from China, for example products like bathtubs, sinks, appliances, and more.
Also, India heavily imports articles used in construction activities from China. Some of these are –
Iron and steel products
Technical construction equipment
Electronic equipment
Plastic and fiber elements
Solar panels.
With production in China going down, the prices in the allied industries are bound to increase, thereby increasing the costs and reducing the profit margins of real estate developers in India.
The slowdown in the construction industry in China will have downward price pressure on global metal prices.
Lower interest rates and commodity prices have traditionally been beneficial for real estate.
The outbreak has also prompted a flight to quality, driving investors into the bond markets, where lower rates are creating more attractive debt/refinance options. People must invest immediately in better cities having more facilities to prevent the virus from spreading. In the short term, buyers have less incentive to purchase if it’s unclear when they’ll get to visit the property.
In the long term, the virus could temporarily weaken sales if the problems persist, say realty consultants. With recent reports of Corona virus reaching Delhi-NCR and Noida, the real estate industry needs to brace itself for an even worse impact than previously thought.
With the threat of infection affecting human lives, the real estate sector can expect a dip in property visits and a reduced home buyer interest.
In this case, Main question is where the buyers should go!
So, as per the new rules all the country India is been lock-down for 21 days. So, it is not possible to invest in property for small buyers or investors who are in confusion and fear or losing their hard-earned money.
Stay safe!
