In this article we will discuss about the impact of covid-19 on the real estate sector in various ways.
The impact of corona virus has become bad for the all businesses, not only for the real estate sector. During 2020 the whole nation went in to the complete lockdown from March to June. Many small industries went through financial issues and have shut down or on the verge of shutting down.
Allied industries which are dependent on construction industry are also faced heavy loss along with real estate sector during this pandemic. Other small and medium sized businesses such as steel bars, cement, aluminum panels, construction machinery parts and many others are directly dependent on the real estate industry. In 2020 all these industries reported losses along with the increase in costs.
During second phase the retail segment hit badly as consumers were wary of visiting shopping malls and shops. The degree of impact is depends on the duration of lockdown and how long economy will take for the recovery. The Indian real estate industry has been disturbed as site visits were prohibited, development exercises were on stop for certain period during lockdown. To stop the further spread of covid-19 government has restricted for the import/export from the foreign countries. For example steel, heavy machinery and other crude materials are imported from china.
The second wave of Covid-19 affected the real estate industry more because after the first stage of lockdown people realized the importance and value of home ownership. As many people have suffered from financial problems during lockdown it was crucial for the common people to pay out home rent. As it was too difficult for the common man to survive and take care of their families during pandemic, people hardly think for the investment or property purchasing. During lockdown no transactions were taking place hence was no changes in property prices, once the conditions will be stable prices may vary.
Now government is strictly following the vaccination program all over the country to over come from covid-19 pandemic. Things are going better now and people are coming out from the panic mode. Soon we may see better recovery and growth in the economy of the country.
Real estate developers are struggling to over come from the impact of covid-19. After second wave of covid-19 the transactions rate was low hence construction business went through the bit loss. As we all know the real estate industry is the major sector which effects the economy of the country and also this sector is the second highest employment generator of the country after agriculture. Hence to support the real estate sector after the impact of covid-19 government of India along with the governments of respective states have taken some initiatives for the development of the real estate sector.
Some of the major initiatives taken by government are:
⦁ “The smart city project” is the prime opportunity for the real estate companies, this project plan is to build 100 smart cities.
⦁ Tax deduction up to Rs. 1.5 lakh on interest on housing loan under union budget 2021-2022.
⦁ In October 2020, the Ministry of Housing and Urban Affairs (MoHUA) launched an affordable rental housing complex portal.
⦁ under the Pradhan Mantri Awas Yojana (PMAY) scheme of the Union Ministry of Housing and Urban Affairs the central government is aiming to build 20 million affordable houses in urban areas across the country by 2022. with the increase in the number of housing units in urban areas will increase the demand for commercial, retail & office spaces hence it adds value in the growth of the real estate sector.