Everybody has a plan until they get punched in the face. The real estate industry is no different. The property sector was pounded by the triple tsunamis of Demonetisation, the Real Estate Regulation Act, and Goods and Services Tax, which left the industry in a much weaker position, given the toxic highs it witnessed during the earlier years.
However, Real estate does not merely comprise buildings made of brick, mortar, glass and steel. It is an enabler of our existence and well-being. Contrary to fears and low expectations, real estate in the post- covid world will most likely survive and eventually thrive as an asset class, though it will look different.
Decentralization, redistribution and restructuring will be the major themes of this transformation.
While it is early days yet, there are visible indications of some of the ways in which the pandemic may alter things for both consumers and developers. It is important to note that the winds of change have been triggered not just by the pandemic. There has been a need for many of these changes and the lockdown has made all stakeholders, including governments, think and act in ways that have heightened this realization.
The home will gain more prominence over the place of work and influence urban development and our real estate choices.
The good news for India is that the long-term housing demand trend remains secular due to a young population which continues to enter the workforce in large numbers. Over the last few years, there had been a gradual shift in mindset among first-time home buyers who began to favor a rental home, challenging the established preference of Indians to buy homes.
The pandemic is driving them back to the desire to own a home. Real estate investments provide a higher sense of security during a crisis, when financial assets come under pressure. Additional space at home, as warranted by work-from-home, is an important consideration as well.
Real estate enables how we live, work, learn and play goes the cliché. Covid-19 has not only stalled the economy but impacted our lives enough for many of us to think ahead and contemplate pressing the reset button on the “live, work, learn, play" routine. Rather than procrastinating, now is as good a time as any to act, though in a thoughtful manner. For after weathering this storm, real estate as an asset class shall emerge stronger.
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