The fast-spreading Omicron variant of Covid-19 and the resultant restrictions on people’s movement and office operations imposed by the government may lead to a delay in conversion of demand and impact real estate sales marginally.
The number of site visits have already started to decline given the restrictions by the various state governments. However, demand continues to be strong based on the digital enquiries, developers and property brokers said.
“The first two shock waves of Covid-19 pandemic didn’t spare the property sector, but the new omicron variant seems to have a muted impact. Temporary sluggishness in the pace of economic activities is seen in wake of restrictions imposed, but not so acutely on construction work,” said Niranjan Hiranandani, vice chairman, NAREDCO National.
According to him, the rising spread of new variants may induce developers to delay the project launches for time being, but markets will soon open by mid-February, once the situation is normalised.
The planned pipeline of project launches is likely to be deferred across key property markets based on timelines of restrictions announced by respective state governments as prospective homebuyers are likely to decide not to venture out while adhering to the guidelines set by the authorities.
“The demand for housing will continue because the one thing that homebuyers have realised during the pandemic is the need to own homes. Not just a home, but a bigger home. So, the demand for housing will remain, what may happen is that due to restrictions, the purchasing decision may get deferred since walk-ins may not be allowed, due to various restrictions. In terms of supply, I do not see much delay. At the most, a delay of a quarter is all we can look at,” said Ritesh Mehta, senior director & head – West, Residential Services & Developer Initiatives, India, JLL.
According to Mehta, pent-up demand might result in more conversations and sales in the subsequent quarters. Besides, it is almost two years into this pandemic, and developers have already adapted to the new normal. So technology, virtual tours have already become a norm now.
Construction work across project sites continues to be normal and is unlikely to be hit significantly as realty developers, based on their experience and learnings from the last two waves of the pandemic, are managing their labourers with medical and other assistance. All registered construction workers have already received both shots of the covid vaccines and there are no major infections among them reported so far.
Although developers have started seeing a decline in visits at project sites, labourers have continued to stay put and construction work also remains on track.
“Site visits have halted completely due to weekend lockdown in Bangalore. The lockdown starts from Friday 10 pm till 5 am Monday morning. People are not willing to get out of their houses due to the spread of the virus. We have made arrangements for our sales staff to stay at the site office itself, but there was no customer footfall. The current situation is a cause of concern, but we haven’t seen the impact so far. Labourers continue to be on site across Chennai, Bangalore and Kolkata,” said Murali Malayappan, CMD, Shriram Properties.
While pandemic-related restrictions are making it difficult for homebuyers to execute their decision to conclude the transaction, it is also seen helping boost the demand for housing.
“The more people stay indoors, the need for a better home or an upliftment in lifestyle becomes imperative. Construction is going on smoothly keeping all covid protocols in place and so is sales. As our team, and the buyers too, are now educated enough to maintain all safety measures and continue with their daily chores,” said Manoj Gaur, CMD, Gaurs Group and Vice-President, North, CREDAI National.
According to Hiranandani too, the pandemic has acted as a demand catalyst for home ownership and as a stimulus for upgrading to larger home spaces. The digital adoption has fuelled the property scouting and research procedure, whereas site visit has slowed down amidst travel restriction.
Most developers are of the view that there is no acute impact of the pandemic delaying construction work this time as the critical needs of the migrant labourers in terms of health care and other economic necessities are being taken care of by them.
Property markets across India have managed to exhibit resilience and hold ground in an extraordinary year marred by the pandemic and lockdowns. While the housing segment has witnessed a robust recovery, commercial real estate has shown stability, especially in the second half of 2021.
Residential segment witnessed an unprecedented year of growth in 2021 with sales rising by 51% on-year to be recorded at 2.33 lakh units across the top eight cities of the country. New home launches also saw a significant rise of 58% with the addition of 2.32 lakh units during the year, showed data from Knight Frank India.