COVID-19 Impact on Chennai's Real Estate Market
The Coronavirus outbreak has driven the world to a standstill. The pandemic has hit every business and taken a toll on the real estate sector, too. The impact of Covid-19 on the Chennai Real Estate market has been unprecedented and devastating ever since its outbreak. The construction activities have come to a sudden halt leaving the migration workers no choice but to migrate to their home states. The national lockdown, social distancing norms, and work from home options in the MNCs to contain the novel coronavirus’s spread have resulted in the city’s real estate market slow-down. The reality market’s vertical growth curve has flattened once again after the twin effects of demonetization and the GST introduction in the Indian economy.
The Chennai realty sector’s prospect has been crumpled due to various reasons. Read through to know more about the impact of Covid-19 on Chennai’s real estate and the way forward to it.
While the first quarter of this year has ceased the realty market constructions due to stringent lockdown and social distancing measures, the second quarter brought a severe blow to the industrial and real estate activities in Chennai. The businesses suffered, and the national GDP dipped into negative figures, causing one of the country’s worst economic recessions. Chennai’s real estate sector is not an exception, and it touched the lowest of lows during the first and second quarter of 2020 after the pandemic. A great deal of uncertainty to the realty market prevailed as the home sales, and new residential/commercial property launches banged-up battling the pandemic.
Migration of Laborers
The stalled construction activities forced thousands of migrant laborers to flee to their home towns, leaving no job. The reverse migration of construction workers caused difficulties in resuming back the construction activities in Chennai. The liquidity constraints amongst developers and homebuyers left the realty market adversely affected. The homebuyers weren’t willing to buy a property or invest in the realty market during this period.
The Work-from-home Norm
The health-emergency forced employers to provide the biggest-ever work-from-home option to employees globally for an unprecedented time. This caused the apartments and workspaces to remain closed and vacant as people started moving out of the city to their native places and started working from home. The demand for the new apartments and commercial spaces has fallen as a result and caused rental to derail. As per the leading research organizations, the property sales declined by 80% and pushed down the overall residential demand to 25% resulting in the increase of unsold inventories.
The Way Forward
The city’s progressive opening up has caused Chennai’s real estate market to recover in the last quarter with several measures by the government. The construction activities resumed, and the developers have been allowed to launch new projects focusing on the mid-income projects and gated communities. With the Covid-19 social distancing norms, homebuyers prefer to invest in properties that provide easy access to the basic amenities. The homebuyers’ preferences have changed relating to the Covid-19 modern-day needs.
The city’s real estate activity is expected to gradually pick up with the relaxation and the government’s recent measures like removal of stamp duty and registration charges on new and ready to occupy flats. The real estate developers have adopted e-launches, virtual site visits, and other innovative marketing initiatives to pull people to invest in the realty market during this festive season. The city’s real estate market will also be endorsed by the proposed expansion of industries, manufacturing, and commercial activities.
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