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Residential housing sales are expected to witness a 25-35 per cent drop in 2020 against the previous year, property consultant Anarock said in its report, ‘Covid-19 – Will it reset Indian real estate?'
The resultant impact in residential sales in 2019 stood at about 2.61 lakh units across top seven cities and may now fall between 1.70 lakh -1.96 lakh units. Likewise, new launches may also witness a 25-30 per cent decline during the same period – from 2.37 lakh units in 2019 to between 1.66 lakh -1.78 lakh units.
Unsold inventory in 2020 will largely remain stable, with single-digit annual decline of around 1-3 per cent. 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 seven cities earlier slated for completion in 2020 now face a high risk of delays.
Impact on affordable housing
The affordable housing segment, which gained significant traction over the last few years, may also take a hit by COVID-19. The outbreak will significantly affect affordable housing's target audience. With limited income and unemployment fears, buyers of affordable housing may defer purchase decisions, leading to an estimated 1-2 per cent rise in unsold stock within this segment in 2020.
Anuj Puri, Chairman, Anarock Property Consultants, said, “Besides demand-supply decline in 2020, significant new trends will emerge across segments of Indian real estate. Covid-19 has derailed the office segment's growth trajectory of last three years. New business models will be tried, making players more reliant on technology for ensuring business continuity. Besides revisiting office requirements, corporates will keep employee health and hygiene of assets as the topmost priority.”
He added: “In Indian retail, the revenue-sharing model will become even more dominant. Retailers will prefer to partner with mall owners to mitigate risks arising from declining footfalls amid such unprecedented crises.”
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