July 15, 2020:
Things we covered for you
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Real estate industry requires steady cash flows. Earlier when the industry was performing better, all the stakeholders including the financial institutions and even the homebuyers have reaped its benefits. The construction industry has seen a downfall over the last few months and its effects are seen in stalled projects as well as in the customer sentiments.
Covid-19 has posed an unprecedented situation and the industry is slowly coming to terms with it and at the same time trying best to adjust to the new requirements and guidelines to sustain operations. Cash flows have taken a major hit. It has affected homebuyer’s budgets and requirements as well. Buyers are leaning towards low-budget homes but at the same time unwilling to compromise on design features such as a WFH facility.
Some developers have taken this adversity as an opportunity and gone back to drawing boards to redesign the upcoming projects and remodelling the ones already built. The built-up areas have drastically come down. Architects are planning creative designs to cater to the customizations of buyers so that social distancing can be maintained in common areas. The designers are coming up with inventive plans to accommodate minor changes and still appease the buyer’s newfound requirements. Real Estate industry is witnessing a paradigm shift in terms of designing and architecture.
In a typical home-buying scenario, a customer would do multiple site visits to understand the project and there was never a case where home purchase happened without prior site-visit, either directly by the purchaser or his family. The pandemic has created a unique challenge which has cascaded into affecting the sales numbers and cash-flows apart from other labour and material challenges seen in the last few months. All the State regulatory authorities (RERA) have also acknowledged the situation and extended the project completion deadline for another 6 months but this creates issues for the buyers.
Thanks to the technology and customers’ willingness to adapt, site-visits are now happening virtually. Even though the number of prospective buyers has reduced, the closure rate has gone up to 40%. This is very encouraging to the industry and calls for embracing the new-age digital platform to do the business.
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The construction industry has consistently yielded a good return on investment. Real estate, specifically home buying is still the No.1 investment option in this country. The affordable housing segment which is already offering low-cost solutions is not able to attract enough buyers and investors. This is because the houses are either situated on the city outskirts or the design specifications do not conform to current requirements.
Developers along with architects and planners are going back to board to design such spaces without compromising on the specifications. Urban homebuyers cannot compromise on the ventilation, good balcony, kitchen with dining area, and a guest bedroom.
To accommodate consumer specifications in their budget, there has to be significant design modifications and planning. Ready to assemble furniture and smart home accessories are playing a vital role in effectively utilizing the limited spaces. IKEA is already working with many leading developers in the country to smartly design ready-to-move-in furnished homes. This will cut down the cost of interiors by 30% or more and at the same time buyer will have a abundant options to choose from as well. Fully furnished homes will cut down the turnaround time for the homebuyers to move-in to their dream home. This will be the new norm in the housing industry going forward.
Architects are even thinking one step ahead in this scenario of matching budgets and specifications by developing innovative floor plans options. Homebuyers are provided with multiple options of floor plans to choose from as that has an effect on cost structure.
Despite the numerous policy changes and introductions in the last three years, the industry has been agile enough to adapt and make necessary changes. The current pandemic situation is also a game-changer in this industry. Policy changes have made this industry regularised and now the current adverse pandemic situation will bring in technology shift and design of smart living spaces so that homebuyers can take maximum benefit along with hassle-free move-ins.
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