The effect of coronavirus Lockdown on Real estate industry
Real estate is the cornerstone of development. It is a field which believes in finding the right value for the right land. It has several associations with science as well as socioeconomic spheres. A piece of land is the most prized asset of any individual. That is the place that they are allocated to perform their duties as well as rest. The value of the land depends on its productivity. What can it be used for and where does it strengthen the value of the individual who owns it.
The real estate economy of India was booming in a vast variety of ways. But recently it has been going downhill, hampering the overall development of the economy in the process. The arrival of the coronavirus lockdown did not help the cause at all.
Real estate can only flourish when the economy is stable and looking for prospects of growth and development. Another important factor for real estate to flourish is a steady flow of materials that can increase the value of a plot of land. As India is a developing country, the scope for infrastructural growth is very high, especially in places which are slowly transitioning from towns to cities. Since it is a very versatile business, it is difficult to predict how it can grow or collapse.
But the economic growth of India has been crippled by the COVID-19 outbreak and the subsequent lockdowns, thereby leading to stoppage in all forms of business and commerce. It was also observed that unemployment levels also started surging as many companies adopted a limited workforce policy. Migrant non-skilled and semi-skilled labourers left for their hometown as they could find sufficient work. They constitute the workforce behind many construction works all around India.
When it comes to investments from individuals, there has been a severe cash crunch that has affected the middle class economy mostly. Investing in land is always something pursued by the middle class and upper classes of the economy. This shortage of funds has slowed the whole process. Individuals spend more on essentials and medical treatments. Cash in hand has become more dominant than the bank. Cash in the bank is only used for emergency situations. Monetary transactions are more day-to-day oriented than ever. There is no ‘comfortable’ surplus to invest. Just like the economy, individuals only invest in assets such as land when they are financially stable, as land requires steady capital to acquire as well as develop. Similarly, non-resident Indians cannot invest in real estate as they are losing their jobs and returning to their hometowns.
Speaking from the government’s point of view, it is severely short of funds due to slow tax collection. Taxes are often exempted in the process due to the global lockdown. The public utilities and services such as transport and railways are scarcely used, thereby generating less income for the government. The tourism sector, which is complementary to infrastructure, is also severely affected due to the travel restrictions imposed by the lockdown. The government would also adopt policies that fund and support medical relief infrastructure and healthcare. Both the government and its citizens are investing only in commodities and medicines. This is where all types of businesses took a severe hit.
Furthermore, shops dealing with plumbing, hardware, tiles and other construction related materials have been shut down as a part of lockdown protocol.
But as the world learns to cope up with this global crisis, there are small and new avenues which diversify this field. Bouncing back and establishing the real estate would take a lot of time and effort. But it is possible through continuous and strong actions towards the right direction.
While the global pandemic has indeed shifted the paradigms of the real estate industry in various ways, exploring reliable and adaptive strategies in property investment has become pivotal. For those who are looking to navigate through the fluctuating market with confidence and the security of informed decision-making, consider Essential Equity Real Estate.
With a comprehensive understanding of the evolving property market trends, especially amid unprecedented situations like a pandemic, Essential Equity Real Estate paves the way for resilient and fruitful property investing, ensuring that every investor is equipped with the strategies and knowledge to navigate through the intricate paths of the real estate realm, even in challenging times