Effects of covid on real estate.

Real estate is one of those industries that rarely goes under recession or faces depression. Well, the impact of covid on real estate took the curve near zero. The industry that always experience boom period or upward slope, started facing negative turn since covid 19 pandemic. Residential and commercial both the industries are badly affected due to covid. The covid impact may or may not last longer but for now it has reached the lowest level.
Labour shortage & capital shortage specifically put the construction industry on halt. Expectations of increase in demand of real estare industry us kind of vague. The prices and demand will keep going down for next few years or atleast until the covid 19 crisis end.
Every state across the nation, especially metropolitan cities like mumbai, delhi, banglore, etc after undergoing heavy recession or you can say depression. People migrating from these cities to their hometowns also resulted in turning the curve towards negative. Lease agreements are almost cancelled and places are vacant. No tenants, no buyers and no demands has literally hit the real estate.
Under commercial sector also, people are not looking for new places to run their business. Setting up offices are moreover done digitally or online these days. People are more concerned about other things so the attention is diverted from real estate. New construction projects are all stopped without a resume date, whereas old ones are still looking for trying to create demands.
Fear can be a reason for negative slope or decrease in real estate. It will take some time to get back to how it was when things were normal. Big builders and constructions houses are facing severe problems and are undergoing heavy losses. Investors are not ready to invest and are trying to get back what they’ve already invested.
According to various surveys, complete real estate sector which includes both commercial and residential will face serious problems. Whether in terms of sales, prices, launches or investment, things may not just effect real estate but will show it’s impact on the whole economy. Due to reduction in real estate investment, economy may not work smoothly. This can be for a longer period of time but atleast until covid 19 crisis ends, impact on economy is expected.
However, out of all this negative points there are some positive points too. Since there is no demand in the market, the builders and construction houses will have to reduce prices. The process will ultimately come to a level that a common man can afford. Not absolutely nil or negative but some where at par can be expected.
Again, this decrease in curve is not permanent, as soon as this covid 19 crisis comes to an end things will get back to how it was. Investment based on speculations are somewhere possible. Because real estate is an industry that faces crisis only when uncertainty arise. And may start being a prosperous industry as soon as things get back to normal. So real estate shows negative result but will soon reach at it’s peak and will be a profitable industry soon.

 

 

 

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