Coronavirus Impact on Indian Real-Estate Industry
The World Health Organization (WHO) has declared the Novel Coronavirus (COVID-19), as a Pandemic. Globally, this Coronavirus disease has already infected 12,73,990 people with 69,444 fatalities.
The outbreak of Coronavirus has led to a great deal of vagueness related to imports, exports, trade, manufacturing, services, tourism and many other industries globally.
The business sentiment is impacted sternly all around the world, and the real estate industry in India is not an exception.
As per The Economic Times news report, Construction, Transport and Chemical manufacturing may be worst affected by this Coronavirus Pandemic.
As things stand today, India imports around 11% of Iron and Steel from China and 20% from South Korea. As per the Business Standard news report, there might be chances of India imposing heavy duties on imports from China. It may lead to a rise in Iron and Steel prices in India.
India is also under lockdown from 25th March 2020 to 14th April 2020 due to COVID-19. Due to this crisis, Indian labourers are migrating from cities to their hometowns in villages. It can lead to shortages of manpower in construction work.
All these things will surely have a direct impact on the steel pricings and other construction materials used in the construction industry.
How is Coronavirus expected to affect the Indian real estate?
India relies heavily on China as it imports articles that are used in its real estate activities. Some of them include:
- Electronic equipment
- Iron and steel products
- Plastic and fibre products
- Technical construction tools
- Solar panels
How will Coronavirus Pandemic impact India’s property prices?
As per the PropTiger report, India’s nine major residential markets have more than Rs. 6 lakh crore worth of unsold units - that’s a massive number!
As per the Business Today news report, if Real Estate Construction Companies and Developers fail to sell-off their constructed residential properties, then this could lead to more than $140 billion of bad loans.
According to Pankaj Kapoor, Chief Executive of LiasesForas, “Indian property prices may fall by 10-20% across India, and land prices may even fall up to 30% due to COVID-19 Pandemic.”
Is the Coronavirus outbreak an opportunity in disguise?
If you look at recent developments from the Indian perspective, the Coronavirus outbreak could be an opportunity for businesses here to increase production capacity.
Yes, they can inspire themselves to be self-dependent by pacing up the steel’s production and give a push to the ‘Make in India’ campaign of the Government.
The Central Government of India is also encouraging steel brands to increase the production capacity and aim for a king’s share of the market.
The Ministry of Steel is already in the process of drafting a blueprint for producing special steel of 10 million tons at a speculated cost of Rs.50,000 crore with giving out 50,000 employment opportunities in the current scenario.
With Coronavirus hurting businesses all over, the Indian real estate industry needs to be ready to face the worse than what was earlier speculated.
But it is not for the first time that it is happening as the world has faced SARS and Bird Flu outbreaks earlier.
The market has recovered every time, and every calamity has something in store for the opportunities to be tapped and scale new heights.
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