The future of the Real Estate Sector Post-Lockdown

APP Delhi-NCR organizes a webinar to discuss the future of the real estate sector post-lockdown

To discuss the state of the real estate market post-lockdown and to discuss the issues pertaining to the sector, APP Delhi-NCR conducted a webinar with the renowned industry experts. The event was moderated by Tarun Bhatia, Kshitij Nagpal, Abhishek Jain from APP and the panelists who remotely attended the session included Mr. Harsh Vardhan Bansal, Director, Unity Group, Delhi; Jenis Francis, Advocate, JF Associates; Kunal Behrani, Unity Group, Delhi.

APP Delhi-NCR has previously conducted many more webinars like this as they are crucial to bringing credibility to the realty sector as per NAR norms and they bring together the experienced experts and big industry players in the market under the same umbrella to discuss the market conditions during COVID 19 and its implications on the sector in the short and long term.

During the the webinar, it was highlighted that since the Work-From-Home trend has been identified as a necessity in times to come and people have to adapt to the same and build their systems to enable them to do the same, it will likely continue after the lockdown ends. For this reason, people would prefer setting up part of their offices within their homes and to accomplish that, in the future they’ll be looking for a bigger space when looking for new homes. “Walk to Work” culture will also get a boost post-lockdown as people would prefer staying closer to their office to safeguard their jobs and businesses. These factors will collectively increase the demand for real estate.

The problem, however, is that while the buyers would be looking at buying the assets post lockdown at cheaper prices, it is unlikely that the prices would come down. In fact, due to the broken supply chains, it is quite probable that the cost of construction of the properties might increase and the industry will need to come up with some innovative strategies to counter this issue.

The webinar also emphasized the importance of the Force Majeure clause in the contracts regarding buying and selling of tangible assets post lockdown. Such an unprecedented scenario can occur once again in the future and it is time that more in-depth thought is given to FORCE MAJURE Clause in the agreements. A Force Majeure clause can end up paying huge dividends during the time of crisis for the parties involved in the contract. However, during these times of unprecedented crises, it makes sense to avoid any legal disputes between the parties and sit across the tables and settle any adaptations to the contract which might have arisen because of this pandemic.

The importance of subvention was also highlighted during the discussion. It was stated that subvention will come in handy to bring the bankers, buyers, and the realtors together during the process of selling & buying the tangible assets related to the realty sector by keeping the funds & interests in mind. It is also expected that with the coming down of interest rates, the value of EMIs will also come down and thus make properties more affordable.

“Every vernacular of the realty sector will get a boost post-lockdown as the challenge will be choosing what you want, need, and require after the crisis. Return on an Investment property will come to face a major boost as well as the buyers will be looking to purchase something which can ensure them a regular return in terms of cash to secure their future. Consequently, the rental income will increase as well.

The commercial vernacular, which is going to be facing a challenge, will be the “Co-Working Spaces” sector, due to the social distancing and hygiene prospects post the crisis of pandemic. Even after the pandemic subsides, it’ll still take some time for the people to shed the cloak of fear and paranoia of contracting the infection. For the same reasons of hygiene and social distancing, there will also be a stark growth in the demand for personal offices compared to other properties post-lockdown.

We’re all facing the same issues here, and I believe that realtors, buyers, retailers, and brokers need to go hand in hand while understanding each other’s situation before this health pandemic evolves completely into an economic pandemic. Digitalization is perhaps the best way to accomplish this goal to keep everyone aware and enlightened – and we shall all work towards it!” said Mr. Kshitij Nagpal, President, APP Delhi-NCR.