Corona to severely impact housing and office sales

Steel Insights Bureau

Current estimates reveal a substantial drop in demand and supply across various real estate segments in 2020 in the wake of the corona pandemic.

Housing sales could witness a 25-35 percent yearly drop in 2020 against the preceding year, reveals a report by Anarock Property Consultants.

Residential sales in 2019 stood at about 2.61 lakh units across top 7 cities and may now fall between 1.70 lakh - 1.96 lakh units.

Likewise, new launches may also witness a 25-30 percent decline during the same period – from 2.37 lakh units in 2019 to anywhere between 1.66 lakh -1.78 lakh units, the report revealed.

Key findings

♦ Housing sales to see 25-35 percent y-o-y fall in 2020; new launches by 25-30 percent

♦ Unsold housing inventory to remain stable, may even see 1-3 percent yearly reduction

♦ Construction delays could run into several months for well-funded projects, few years for others; 4.66 lakh units to be previously completed by 2020-end face high risk of delays

♦ Affordable housing target group most affected, limited income & unemployment fears to defer purchase decisions

♦ Indian office sector to see significant impact by Covid-19; besides demandsupply decline, key occupiers to re-look office space requirements

♦ Indian retail leasing and new mall completions to see 30-50 percent dip against previous growth estimates; revenue-sharing model to gain dominance

♦ Technology to gain significant precedence in Indian real estate from 2020 onwards

Unsold inventory in 2020 will largely remain stable, with single-digit annual decline of around 1-3 percent. The nationwide lockdown has completely halted construction activity - project delays could run into several months for well-funded projects, and a couple of years for others. Nearly 4.66 lakh units across the top 7 cities earlier slated for completion in 2020 now face a high risk of delays.