Impact from Corona Virus on Pune Real Estate Market
No one truly is able to figure out how the coronavirus may impact the Indian real estate market.
It cant be denied that the effect of the corona virus (COVID-19) is going to be long lasting on the global economy. Originated in China, the world’s second largest economy, has the largest outbreak with over 90,000 cases reported and above 4000 deaths as of today and has suffered the greatest. The virus has halted productions in major corporations and interrupted supply chain and resulted in economic volatility, and it could lead to an estimated $2.7 trillion in lost global output, according to Bloomberg Economics.(source: https://bit.ly/3aP1ENY)
Two people from Pune, who had returned from Dubai recently and are related to each other, on March 9 became first cases from Maharashtra to test positive for novel corona virus infection, a civic Health department official said. In India first fatality is reported from Karnataka.(Source: https://bit.ly/2vNGHEg)
Corona virus is making worldwide property market jittery. But in India, the overall impact could be limited which can be said with probability as of now, unless the outbreak lasts long. According to a report by CBRE, there has been no material impact thus far on the retail market. “Both physical retail and online retail continue to witness slight growth in key retail markets as more global retail brands will enter and expand,” it says in its report Why the Corona Virus Outbreak Could Have a Lasting Impact on Asia-Pacific Real Estate.(Source: https://bit.ly/2vO1Pu5)
However its seen that the office leasing demand in Pune has slowed down a bit. Considering the economic slowdown impacting real estate market specially after the Yes Bank moratorium decision by RBI last week, the decisions of new leasing for offices, retail shops in Pune etc are being put on hold. On the industrial and logistics sector, the outbreak is likely to have a major impact in Maharashtra region. The logistics sector has been witnessing robust growth due to supply-side incentives and promotion from the government and demand from local and global 3PLs, e-commerce firms however the overall occupation of operations have marginally improved.
In the short term, buyers have less incentive to purchase with uncertainties. In the long term, the virus could temporarily weaken sales if the problems persist, say KC & Hegde realty consultants.
On the manufacturing and material sourcing for construction industry, India heavily imports articles used in construction activities from China.
Some of these are –
- Iron and steel products
- Technical construction equipment
- Electronic equipment
- Plastic and fibre elements
- Solar panels
There could be a temporary halt with construction activities with virus effect in Pune and surrounding places, labor issues may persist and people may fear of virus getting them at construction sites with less precautions. Malls and retail shops will see less crowd, and stay off commercial places during weekends in Pune.
Conclusively, the real estate industry needs to brace itself for an even worse impact than what was perceived. With the threat of infection affecting human lives, results in reduced buyer interests . Every calamity is an opportunity to scale new heights and our consultants hope we see a rebound very soon.