Mumbai: The year 2020 will see a substantial drop in demand and supply across various real estate segments, says an ANAROCK property consultants report. Housing sales would see 25-35 per cent yearly drop in 2020 against the preceding year due to the impact of the coronavirus.
Residential sales in 2019 stood at approximately 2.61 lakh units across top seven cities (MMR, Pune, Delhi, Kolkata, Hyderabad, Bengaluru, NCR) and may now fall between 1.70 lakh -1.96 lakh units.
Likewise, new launches may also witness a 25-30 per cent decline during the same period – from 2.37 lakh units in 2019 to anywhere between 1.66 lakh -1.78 lakh units, reveals the report.
Besides, the unsold inventory in 2020 will largely remain stable, with single-digit annual decline of around 1-3 per cent. The nation-wide lockdown has completely halted construction activity - project delays could run 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, according to the report. The affordable housing segment, which gained significant traction over the last few years, may also take a hit from Covid-19.
The outbreak will significantly affect the affordable housing's target audience. With limited income and unemployment fears, buyers of affordable housing may defer the purchase decisions, leading to an estimated 1-2 per cent rise in unsold stock in 2020.
Anuj Puri, Chairman, ANAROCK Property Consultants said, “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 the last three years.
New business models will be tried, making players more reliant on technology for ensuring business continuity. Besides revisiting office requirements, corporates will keep employee health and hygiene of assets as the topmost priority.”
"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."
The report also analyses the impact of Covid-19 on India's once-booming commercial office and retail space sectors, and the changing trends therein. For instance, current estimates indicate office supply will remain between 33-40 mn square feet in 2020 as against nearly 47 Mn square feet in 2019 - a reduction of 15-30 per cent.