The Covid-19 global pandemic is now in the center stage of social, political, economic, and health discourse and it's bound to remain so for quite some time.
When it comes to the Covid-19 impact on Hyderabad real estate market, it is inevitable that it will leave a trail of both short-term and long-term consequences on all the stakeholders across the entire real estate chain.
Whether you are a potential home buyer, investor, real estate agent, banker, developer, or a builder, panic may set in if what one gets is based on sketchy information. This is why our team at www.propertyadviser.in attempts at separating the chaff from the grain of doubt to give you a clear picture of the road ahead.
One may call it a real estate price reset, but it's a fact the pre-COVID 19 land rates in Hyderabad will take a dip. In fact, experts from the National Real Estate Development Council (NAREDCO) even predicted a 10-20% price drop across the country.
During the 2008-9 global recession, property prices fell by up to 33 percent across the U.S, according to CoreLogic, a global property analytics consultancy.
However, this may come as a boon in disguise for those with means of funding their dream home buy in Hyderabad! Read: What Buyers Must Look At Before Buying Property in the Time of Covid-19
If you are thinking of postponing your dream home buy to a later date, you may likely have to wait longer as the pandemic will halt the launch of new projects by developers due to disruption in the chain like unavailability of labor or face investment roadblocks.
The priority for most real estate builders in Hyderabad, for the time being, will be on offloading unsold inventory at a lower price to ensure enough liquid funds at their disposal.
Even for first-time home buyers, most may prefer to opt for Ready-to-Occupy units rather than rely on under-construction projects.
RERA Safety Net:
Post the pandemic, there would be an increased focus on investing in one’s dream home with the Real Estate Regulation Act (RERA) approved by real estate builders in Hyderabad to minimize risk exposure.
This is because many prospective home buyers whose projects may not be covered under RERA, may stand to lose if the coronavirus-induced recession delays the project further. The RERA approved projects have inbuilt safety for the investments made by consumers.
Realty Index Shake-up:
With listed real estate companies exposed to market uncertainties, stock market investors will have to brace up for smart decisions for the safety of their investment. Poor investor confidence in the realty space will affect future projects if corrective policy measures are not taken to arrest it. The Nifty Realty Index has already registered a fall of up to 48% since the COVID-19 outbreak, according to reports.
Perhaps the turbulent times ahead prompted NAREDCO to seek $200 billion worth relief from the Indian government.
Notwithstanding the RBI’s three-month moratorium on repayment by home loan borrowers, the temporary respite may not bail one out in a pandemic induced recession if pre-existing home buyers with bank-loan adjusted EMIs are faced with job loss or drastic pay cuts.
The prospects of layoffs loom large across several sectors including the IT sector, which will directly or indirectly impact both the bankers as well as the buyer sentiment in Hyderabad real estate market.
By: Prabeer Sikdar