With current estimates showing a substantial drop in demand and supply across various real estate segments in 2020, housing sales are likely to see a fall of 25 to 35 per cent this year compared to 2019, a new study has revealed.
According to "COVID-19 - Will it Reset Indian Real Estate?" report by ANAROCK Property Consultants, residential sales in 2020 may fall to 1.7 lakh to 1.96 lakh units in 2020 compared to 2019, when sales stood at around 2.61 lakh units across top seven cities.
"Likewise, new launches may also witness a 25 to 30 per cent decline during the same period – from 2.37 lakh units in 2019 to anywhere between 1.66 lakh -1.78 lakh units," the report said.
It added that unsold inventory in 2020 will largely remain stable, with single-digit annual decline of around 1 to 3 per cent.
The nationwide lockdown has completely halted construction activity with project delays running 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," it said.
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 to 2 per cent rise in unsold stock within this segment in 2020.
According to Anuj Puri, Chairman, ANAROCK Property Consultants, 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," he said.
“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,” he added.