Real estate sector hit as Covid disrupts housing sales, project launches

The second wave of Covid-19 has put brakes on the recovery of the real estate sector. Property consultants suggest that sales have started falling since April and the situation is likely to worsen if the situation does not improve

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File photo

Economic activity in many states has been hit hard due to the second wave of Covid-19 in India and some important sectors have started facing losses due to the prevailing situation. Real estate is one such sector that has been affected.

For a sector that staged an impressive recovery after the coronavirus pandemic in 2020, the second wave came as a rude shock. There has been a dip in property sales, new project launches and commercial rentals since last month due to semi-lockdowns and other localised curbs imposed by states to contain the virus spread

According to reports, homebuyers have become cautious in view of the Covid situation and avoiding any property site visits even if they are interested in buying a home. A number of transactions have also been put on hold as consumers are now opting to reduce spending on non-essential items including homes

Real estate activity has suffered in key cities like Mumbai, Delhi, Bengaluru and others. For instance, the Mumbai Metropolitan Region (MMR) in Maharashtra has witnessed a drop in property registrations.

A recent report by Anarock Property Consultants indicates that the second Covid-19 wave coupled with the expiry of the stamp duty cut period impacted the monthly growth momentum of Mumbai’s housing sector

In Delhi, where a sharp surge in Covid-19 cases has brought economic activity to a standstill, the real estate developers are struggling as well.

Many experts suggest that the demand for housing sales, especially the luxury segment, has witnessed a dip in April 21. While most developers suggest that the situation will not be as bad as April 2020, they are worried that the sector will take a big hit if the Covid-19 situation does not come under control soon

COVID DISRUPTS HOUSING RECOVERY

The second wave came as a shock for many real estate developers, who are struggling on all fronts since April. While homebuyers have reduced drastically, a shortage of labour has led to delay in project completions. This could led to additional cost factors for real estate firms

Prashant Thakur, Director & Head Research, ANAROCK Property Consultants recently said that the April-June quarter will “certainly be impacted” by the rapid spread of the virus. Other property consultants seem to agree, but add that it is too early to say if the impact will be widespread like last year

https://www.indiatoday.in/business/story/real-estate-sector-hit-as-covid-disrupts-housing-sales-project-launches-1798377-2021-05-03