Is real estate on track…?
The real estate business in Hyderabad has witnessed a steep growth in recent times with a rise in demand for residential flats and office spaces as well. However, COVID-19 has stalled many businesses across the world including real estate, and affected the global economy.
March is the crucial month for sales and reaping greater profits. However, with the virus spread, all the construction works, investments, sales are halted from March.
Now we are in lockdown 4.0 phase.
By this, we can understand the severity of this pandemic.
As there is a rise in the infections, it may worsen the situations. And the growth of this sector will depend on the severity of the situation. As every day is making a great difference, the future of the real estate business is unpredictable.
Though the lockdown has impacted the real estate industry adversely, it is predicted that it may pick up soon. Some reports say it takes 6-12 months to bounce back to normal.
Adverse effects due to COVID-19 Pandemic:
- As per PropTiger data labs, there would be a 15-20% rise in real estate prices in Hyderabad for the past five years. However, due to the virus spread, the demand is lowered.
- It has affected not only the realtors but also the workers as real estate is the second largest sector that generates more employment.
- Most of the people are postponed their buying decisions as they are unsure about their job security.
- Delay in the supply of construction materials and the shortage of laborers as migrants head home.
- It has affected the projects like apartments for sale in Hyderabad worth of 45,000 crores around greater Hyderabad.
- Cement prices were doubled and there is a rise in a liquidity crunch as well.
A Ray of Hope Amid COVID-19 Shadow of Fall:
Though the state lockdown makes people stick to their homes completely, there is a rise in online searches for homes. This is a great advantage to the realtors as they can transform the physical visits into virtual and gain prospects thus increase sales in no time.
- On 28th March, ICRA told that RBI has announced a moratorium on loan installments for three months and it will be extended from 22 May 2020 to 31 August 2020.
- Force majeure norms gave a sigh of relief to builders as the timelines of statuary compliances, registration, and project completion dates were extended under RERA.
- The government has extended deadlines for projects for 6 months and also extended the CLSS(credit-linked subsidy scheme) until March 2021 for the middle-income group.
- As per IBC & RERA, exemptions were given for penalties as well.
- There will be Improvement in demand for ready to move homes once operations resumed fully.
- With the resumption of real estate works, brokers had an opportunity for network reconstruction, and there will be growth in the number of prospects.
- Due to lockdown, owners got an exemption from paying EMI on home loans for 3 months.
- The interest rate on home loans is reduced.
- The time for paying taxes on properties is also extended.
- Buyers got an exemption from paying EMI on home loans for 3 months.
- The interest rate on home loans is reduced and it will be between 7.15 to 7.8 percent.
- Now, buyers can negotiate deals and get discounts by builders on ready-to-move homes.
- The time for paying taxes on properties is extended.
- For property buyers, this is the right time as there would be low down in the cost of 3 BHK flats for sale in Banjara hills.
The conditions of Real Estate of Hyderabad:
- From 15th April 2020, the Telangana state government has allowed the resumption of real estate operations.
- On May 2nd, Telangana has allowed construction activity in Hyderabad.
- Since May 8, there are over 28,000 property registration transactions have done and earned 78 crores within 10 days after full-scale operations of the registration and stamps (R&S) department began.
- As per reports on May 15th, the TS-bPass will be implemented in 87 municipalities on a trial basis from June.
- On June 11, more than 36 real estate developers associations requested PM Modi in an online petition for more support business for real estate prices in Hyderabad operations. Their key demands include liquidity ease, one-time debt restructuring, demand creation, and incentivizing. This petition earned around 35,000 signatures from brokers, developers, architects, structural engineers, and homebuyers from housing society welfare associations.
- The chief secretary Somesh Kumar said that the Telangana government has already given permissions for supplying cement, steel, bricks, and sand. And he directed builders to take safety measures while constructing and for the migrant labors and provide them extra facilities such as incentives and medical care in a teleconferencing meeting with top project developers, representatives of Telangana Real Estate Developers’ Association of India (TREDAI) and Confederation of Real Estate Developers’ Associations of India (CREDAI).
In a nutshell, the real estate business in Hyderabad has affected by the Global Health Emergency ordered by WHO. Its impact will continue but the real estate will bounce back amid uncertainties within a year.
Let’s keep our fingers crossed that real estate will be on track to rise again.