Why real estate prices are likely to remain stagnant post Covid-19
In the wake of increasing threat off Covid-19, the nationwide lockdown has plunged almost all the sectors. The property buyers have been keenly waiting to know whether the real estate prices will go down or remain stagnant. Surprisingly, even after witnessing a pile-up of inventories and changing market dynamics, the real estate prices haven’t gone down. The developers have maintained their prices in anticipation of a revival in demand.
Although some reports suggest that the prices are falling in some of the cities, the rate of declines is quite minimal. Some luxury properties in Mumbai have witnessed a price decline of 20 to 25 per cent, while properties in Delhi have seen a reduction of 8 to 15 per cent. However, the post Covid-19 era is likely to balance out these price structures. Developers with better reputation can tide over this pandemic and remain largely unscathed.
However, developers operating on low margins do not have the luxury to make things happen. They are coming up with innovative offers to overcome issues like inventory pile-up and cost overruns. The need of the hour is to change the way companies operate. Be it the virtual meetings or telephonic conversation, adopting the work from home concept can prove to be fruitful at this juncture.
Improving the technology and investing in new assets is the way forward. The manpower will need to evolve and get more disciplined with respect to utility things like masks, sanitizing hands, maintaining physical distance, etc. Even after the relaxations given by the central government, it will take a huge effort to re-start the construction work due to the migrant crisis and unavailability of raw materials.
Considering all these factors, it will be a challenge for the real estate sector to bring the train back on track. However, the experts believe that the revival of demand post Covid-19 will turn the tide in the favour of real estate sector that will keep the property prices balanced in the longer run.