Real estate and construction were two industries that got badly mauled by COVID-19. They were in a bad shape before the pandemic. But they were left off worse post the coronavirus epidemic.
There were even largely ignored by the Rs-20-lakh crore economic package. While some measures were announced, the industry feels that it is not enough to revive an industry that was bleeding for many years already. According to a KPMG report, due to COVID-19, the real estate sector in India is projected to lose about Rs 1 trillion by the end of the financial year. And this does not include the agony of job losses and impoverishment.
To elucidate more about this sector, Niranjan Hiranandani, National President of NAREDCO; and Co-Founder and Managing Director, Hiranandani Group, will be seen speaking at the webinar organised by the Free Press Journal and IIM Indore on June 18 at 3 pm. Since he is also President, Assocham, his views do carry a lot more weight than those of others.
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Supported by Big FM and Moneylife, the webinar is part of the series ‘India After COVID-19’. There are many pressures the industry is facing. But at present, the most talked topic is the need to cut prices to spur demand.
While the industry considers this as a wrong move — the costs have to be cut elsewhere — policymakers have been advising the real estate sector otherwise. It will be interesting to hear Hiranandani’s view on the same.
The fear of contagion and new bankruptcies in the real estate sector cannot be ignored. Every time there is a slump in demand, then the industry will have to reduce the price, which will have a negative impact on the sector. According to Anarock report, housing sales across top seven property markets in India are likely to witness a 25-35 per cent year-on-year drop in 2020, while absorption of office spaces is also likely to dip 15-30 per cent owing to the impact of coronavirus pandemic.
Real estate not only provides innumerable jobs directly, but it also takes care of jobs indirectly as it supports many micro, small and medium enterprises (MSMEs). At this webinar, Hiranandani will also speak about the impact on the MSMEs segment as well.
The biggest challenge for MSMEs has been scarcity of working capital. While the banks were flushed with liquidity, it took some time to percolate to the MSMEs. Hiranandani, as Assocham president, has been spearheading the cause of MSMEs. It would be worth listening to his view on this.