Has Covid-19 changed the real estate market forever? And should you be changing your investment strategy during this post-pandemic era? You are not alone in asking these questions; hundreds of articles can already be found on the Internet on this subject. But before you make any investment decisions based on Covid-19, here are the REAL some important questions we must understand: ‘Is Covid-19 the only reason real estate has changed so much?’ And ‘What will the property market look like in the future, beyond the pandemic?”
There’s no doubt that the Covid-19 pandemic has hit the real estate market hard, particularly residential properties. Thanks to the pandemic, residential sale values fell by 7% in 2020, while demand declined by 25% due to the mass reverse migration out of metro cities. While the slowdown in 2020 has not gone unnoticed by anyone, not everybody has spotted the fact that Covid-19 is not entirely to blame — in reality, residential realty has been falling rapidly over the past decade. As of Q1 2023, the unsold inventories across seven cities (Mumbai, Chennai, Hyderabad, Bengaluru, Kolkata, Delhi NCR and Pune) have increased by 2.8% Q-o-Q basis.
Reality Of Realty Has Changed | How To Invest In The Future
Vaishnavi Kavya
From dream investment to nightmare: Even as the sun sets on residential property — for a few years, at least — it is rising rapidly in commercial real estate (CRE) in India. While residential realty has been falling since the global financial crisis of 2007-08, commercial real estate has been growing year after year in India. Last year, gross leasing of office space increased by 25% to an all-time high of 61.6 million sq ft, according to property consultant CBRE.
Residential property was already plagued by a slowdown in the past few five years, following the demonetization, the implementation of the Real Estate [Regulation and Development] Act (RERA), and the Goods and Services Tax (GST). What the pandemic has done though, is make the problem worse: people migrated back to their hometowns, leaving property owners without steady rental income; new projects were stalled due to lockdown and the ensuing manpower shortage; developers were left with a major cash crunch and liquidity issues and as a result, many constructions are delayed.
