The Covid-19 outbreak seems to have an unforeseen effect on the housing sector. During the lockdown, with families investing more time at home, organized real estate companies have seen buyers' rising interests. Few had thought that a shutdown would cause people to consider buying a home. With work-from-home being the latest standard since the lockdown, the actual sales can still take 6-12 months. However, first-time home buyers and mid-range buyers are more encouraged to buy now, more than ever.
Real estate is a wide array of capital. Although social distancing requirements will require different solutions in retail, improved familiarity with the work-from-home model and other trends such as hot-desking would have a long-term effect on the market for office space. Owing to which, commercial real estate and retail will be gravely hit.
Being shut away for over 2 months in households has caused customers' minds to have this level in decision-making where they are no more able to deal with compromises. The residential property industry was projected to be a full washout with nil transactions for the first part of the new financial year. But the lockdown is slowly shifting the decision-making in favour of buying a house over renting it.
As for demand, there are very fascinating trends. Enquiries come from users who have never accessed the Mahindra Happinest websites, after tackling and consuming our digital ads. Developers are now seeing current customers returning and searching for bigger units.
Real estate has much to catch up in certain areas such as e-commerce. Sales of real estate is motivated by how to get a consumer to view a project site and/or a sample flat. Bookings highly depend on getting the consumer to visit the location and have a physical recce. Closing a contract remotely could create challenges for the channel partners. This needs to be improved and hence, modern tools for digital transactions are being developed to facilitate consumers, a remote experience of the product.
Everyone is worried about the shortage of demand but there are supply restrictions with the migrant labour going back to their homes. To solve this problem, Mahindra Happinest aims at the involvement of even more technology and prefabricated construction. Now, with construction labour scarce, developers are going to start accepting that. With increasing dispersion, the economics will enhance. This is a systemic transition for the long run and the market will certainly never go back to the earlier days.
Although the housing sector forecast appears more positive compared with retail and industrial viewpoints, a full-blown recovery will take its due time. Mahindra Happinest believes that the online sales pattern will also start picking up in times to come as innovative marketing and sales alternatives are being worked on.