News: Coronavirus impact: Mumbai, Delhi property purchases see huge drop-25-03-2020
Updated On: Mar 25, 2020
The report said the impact has been most drastic in Mumbai and Delhi, while the situation in Bengaluru is slightly better.
(This story originally appeared in 
BENGALURU: The Covid-19 is yet another black swan moment in India’s residential real estate market which will lead to further dip in sales and postponement of launches, brokerage firm ICICI Securities said. “Since early March 2020, the Covid-19 scare has led to buyer footfalls falling off dramatically in the largest markets of MMR (Mumbai Metropolitan Region) and NCR and to a lesser extent across South India. The prospect of falling sales in ongoing projects and deferment of upcoming launches threatens to become the next Black Swan for an already weak residential market,” it wrote in a report last week.
The report said the impact has been most drastic in Mumbai and Delhi, while the situation in Bengaluru is slightly better. And it is expected to be further exacerbated now as the country is asking citizens to avoid stepping out to prevent the spread of the pandemic.
“The slowdown since end-February is apparent; and while site visits are marginally down, the decision-making process is hugely delayed,” said National Real Estate Development Council president Niranjan Hiranandani. The sector has been down for nearly six years now as buyers stay away from a tepid market. Demonetisation, the RERA Act, GST and the NBFC funding crisis has dealt a body blow to the industry. Many developers have changed track and are focusing on commercial office space, which have been yielding better returns.
Following the coronavirus crisis, developers with strong balance sheets will be best placed to weather the storm. “With residential real estate typically being a ‘touch and feel’ high ticket purchase, any extended spell of social distancing owing to Covid-19 may lead to cash flow management issues in ongoing projects where a fall in collections may lead to a drop off in construction activity. Further, new launches planned in April-May 2020 will be pushed back till at least September 2020 to coincide with the festive season,” ICICI Securities said.
