InvestorQ : How do you see the impact of the COVID-19 lockdown on real estate projects and home sales in India in the next few months?
Rutuja Nigam made post

How do you see the impact of the COVID-19 lockdown on real estate projects and home sales in India in the next few months?

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Arti Chavan answered.
2 years ago
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Indian realty prices have been held at higher levels for some time now. However, some of the leading realty consultants now believe that the COVID-19 lockdown may finally provide the reality check for the real estate sector. The impact of COVID-19 is threatening to change an otherwise complacent industry. Leading realty consultants are veering round to the view that a sharp slump in demand and a mountain of unsold inventory could finally result in a sharp correction in prices. With uncertainty over jobs, salary cuts and future cash flows; big-ticket discretionary purchases are not on the priority list at all. Anarock Property Consultants expects demand to fall by 35% and prices to fall by up to 20% in the top 7 urban markets in India. In fact, a report by Jones Lang LaSalle has pointed out that unsold inventory has locked up nearly Rs.3.75 trillion of funds ($50 billion) and that will lead to desperation to sell by some of the realty companies. End user demand is expected to take a sharp hit. One big challenge could be that the unsold inventory could increase the financial risk of these realty companies and may force banks and rating agencies to become extra cautious.

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