A study of the effects of Coronavirus on Indian real estate

1. A STUDY OF THE EFFECTS OF CORONAVIRUS ON INDIAN REAL ESTATE Even though India's real estate sector was recovering from a period of relative stagnation following two waves of the Coronavirus pandemic, the new strain of the virus, Omicron, is quickly becoming a subject of concern for the government and the real estate sector in general. If the situation deteriorates as much as it did during the first or second outbreaks, it will have a detrimental influence on the real estate industry, which has been able to make headway despite the two epidemics' dramatic shifts. As of December 5, 2021, India had recorded 21 instances of the Omicron variation of the Coronavirus, which the World Health Organization has designated as a 'variant of concern.' Many of these incidents were recorded in Maharashtra, Delhi, Rajasthan, and Karnataka. Even though states in India have increased their immunization programmed and implemented safety measures to combat the spread of the Omicron variant, the fact that the government has yet to restrict international travel movement remains a source

2. of concern – dozens of countries have imposed travel restrictions on southern African nations since the mutation was first discovered in South Africa. The novel Omicron Coronavirus strain has been verified in more than 25 countries, according to Tedros Adhanom Ghebreyesus, director-general of the WHO, and this number is projected to climb. PROPERTY PRICES ARE RISING IN EIGHT RESIDENTIAL AREAS According to statistics accessible on PropTiger.com, the average value of homes in India's eight top residential markets increased somewhat during the April-June 2021 period. While cities such as Hyderabad and Ahmedabad have experienced a 5% increase in new apartment pricing when compared to the same period in 2020, other cities have seen significantly lesser increases. Except for the Mumbai Metropolitan Region, prices have risen, albeit modestly, during a period when the second wave of the Coronavirus epidemic wreaked havoc on the economy. PRICE GROWTH: CITY-WISE BREAK-UP City June 30, 2021 the average price was (in Rs per sq ft) Annual percentage growth 5 Ahmedabad 3,251 Bangalore 5,495 4 Chennai 5,308 3 Hyderabad 5,790 5 Kolkata 4,251 2 MMR 9,475 No change

3. NCR 4,337 2 Pune 5,083 3 National average 6,234 3 "Supply and demand were severely disrupted in the first two months of the second quarter of 2021 as most governments imposed piecemeal lockdowns to curb the spread of the virus." However, some ground was gained covered on both indicators during June, when states began to open. The same may be seen in the Q2 demand and supply figures. We anticipate some improvement in both indices of real estate health in the coming quarters since India's immunization program is expected to cover a big portion of Elara Technologies Group CEO Dhruv Agarwala stated, "the country's population." An increase of Covid An increase of Covid- -19 instances may undermin 19 instances may undermine real estate's recovery path e real estate's recovery path According to the chairman of industry association CREDAI, the market for residential real estate in India may be thrown off track due to a substantial increase in the number of new Coronavirus infections.

4. As of today, India accounted for 13.08 percent of all current Coronavirus cases worldwide. It is now the second most impacted country in terms of active cases. On June 2, 2021, India's overall caseload was 2,83,07,832, with a total of 3,35,102 deaths from the virus. Because of the increase in incidents during the COVID-19 second wave, significant sections of India, particularly Delhi, Maharashtra, Rajasthan, Odisha, and Gujarat, are now subject to restrictions such as partial Lockdowns, weekend lockdowns, curfews at night, and so on. "We are in the midst of the COVID19 epidemic's second wave." I assume there will be no problems if there is migrant labor in the field to provide supply chain support. In the event of a total lockout or loss, (buyer) sentiment may suffer. "COVID-19 may prove to be a short-term dampener," CREDAI national president Harsh Vardhan Patodia stated during a virtual press conference. The demand for homes in India may be impacted because of a shift in the banking system's position. According to a recent Quantico Research analysis, the second wave of COVID-19 will impact the Indian economy by encouraging individuals to save rather than consume. This contrasts with the first wave in 2020 when the loss in economic growth was mostly caused by supply interruptions because of a lengthy national lockdown. This would have a significant impact on property purchases in the nation that necessitate large-ticket expenditures. "The expectation of a consumption slowdown appears to be more evident now than it did last year." In contrast to a V-shaped recovery, consumption redux this year might be more "U-shaped," Quantico Research analyst Yuvika Singhal observed, while cutting India's FY 2022 growth forecast by 150 basis points to 10%. Unless the government agrees to reduce the tax burden on house purchasers, demand for residential spaces may suffer, notwithstanding consumers' optimistic perspective on this asset class in the aftermath of the epidemic.

5. According to Niranjan Hiranandani, national president of NAREDCO and founder and MD of Hiranandani Group, notwithstanding the short-term interruptions created by the Coronavirus epidemic, demand for real estate has always remained high. "Buyers were discouraged from finance as a result of the high prices attached to the acquisition procedure." Its price noting that patrons find themselves paying thirty-three p.c of the purchase worth in varied government taxes. "As a result," he said, "it is equally false to imply that there has been an increase in demand." The players must simply assess where the demand is and supply accordingly, while the government must reduce the burden on property purchasers by granting stamp duty exemptions, according to Hiranandani. Meanwhile, the massive increase in the number of Coronavirus infections has influenced India's office markets as well. According to two worldwide property brokerage businesses, net lease activity decreased during the January-March 2021 period due to the current scenario. While Cushman and Wakefield reported a 48 percent yearly fall in net leasing of office premises across seven major cities during this period, JLL

6. India recorded a 36 percent decline in net leasing activity during the quarter in similar areas. THE AFFORDABILITY OF HOUSING IS GROWING As India's Coronavirus vaccination campaign proceeds, the advantages of the immunization program will be visible in the country's real estate market. If rising home affordability is any indication, India's residential real estate market is anticipated to see higher sales and supply in the January-March 2021 timeframe, despite the sector's continued effect from the Coronavirus epidemic. Despite the RBI's decision to leave the repo rate constant at 4%, house buyers may already obtain loans with annual interest rates as low as 6.65%. This contrasts with the January 2020 average home loan interest rate of 8%. Price growth in the housing sector has also been limited in the last year, because of the effect on demand Property brokerage company JLL India stated in research titled 'India Real Estate Outlook – A New Growth Cycle' that new home supply in 2021 will continue to be in the inexpensive and mid-segment, with developers aiming to capitalize on significant pent-up demand. With major rating agencies revising up India's GDP outlook, the country's housing sector rebound may be better and faster than projected. On March 24, 2021, Fitch Ratings upgraded India's GDP estimate for fiscal 2021-22 to 12.8 percent, up from 11 percent before, citing "a larger carryover impact, a looser fiscal posture, and better virus management. “Several global rating agencies and think tanks, including Moody's Analytics and the Organization for Economic Cooperation and Development (OECD), have looked at India's GDP growth estimates, as the home immunization drive against the virus, gets traction. With the economy improving and employment being stable, the brokerage business believes that the current pace in house sales will continue in 2021.

7. VACCINE DISTRIBUTION TO RESTORE NORMALITY IN INDIA'S CORONA-AFFECTED HOUSING SECTOR The government of India has contracted Pune-based Serum Institute of India Ltd, the world's largest vaccine maker by volume, to manufacture a billion doses of AstraZeneca's Coronavirus vaccine, which began distribution across sites on January 12, 2021. As India begins the battle to vaccinate its more than 1.3 billion people, By mid-January, the beneficial impact of what could be described as one of the world's largest immunization programs would be seen in the country's residential real estate industry, which employs the greatest number of unskilled employees. With a huge vaccination effort starting, risks to the recovery may be reduced, and economic activity is likely to go up in the second half of 2021, according to India's Reserve Bank of India (RBI) will issue its monetary policy announcement on February 4, 2021. Financial markets remain buoyant, bolstered by easy monetary conditions, ample liquidity, and vaccine deployment optimism." "Growth is improving as a result of the adoption of the vaccination program across the country the outlook has brightened dramatically," RBI governor Shakti anta Das said.

8. Amid the launch's anticipation, Green shoots of resuscitation have already emerged as a result of the immunization campaign, as seen by quarterly home sales and fresh supply figures. Following a record low in the preceding two quarters due to a substantial spike in the number of illnesses – India has recorded approximately 10.5 million infections as of January 12, 2020, COVID-positive cases and 1,51,000 deaths due to virus infection – home sales in India's eight prime residential markets reached 58,914 units in the October-December period of 2020, representing a 68 percent quarterly increases. New supply data also revealed a considerable increase, with a 173 percent quarter-on-quarter (Q0Q) increase. "The contagion has been prevalent since December 2019, but the situation in India only became alarming in March 2020, while the impact of the coronavirus decimated the Chinese economy. “The closure, which has brought most of the country's economic activity to a halt, has affected all industries, including real estate. Regardless of the general gloom caused by the pandemic, the fact that housing sales in India's key markets have begun to recover demonstrates the immense potential of the real estate sector, According to Agarwala, the sector's performance is particularly good given

9. that the epidemic has harmed the income-generating potential of a huge number of individuals. While this may be interpreted as the beginning of a full-fledged and sluggish but steady recovery, much will rely on how quickly Asia's third-largest economy, with its poor health and transportation facilities, recovers. despite supply-side issues, overcomes the enormous challenge of getting the vaccine available to its vast number of individuals The same element would influence the broader economic recovery scenario, which would then play a role in molding the future of India's residential realty industry. As a result, India's economy is in shambles. Even in the best-case scenario, India's GDP growth is expected to fall by a record 7.7 percent during 2020-21, with the pandemic having a significant impact on the industrial and services sectors. Global agencies and think tanks, on the other hand, predict a considerably sharper recession. The International Monetary Fund (IMF) anticipated that India's GDP will decline in its World Economic Outlook issued on January 26, 2021, at 8% in the current fiscal year, which is greater than the 7.7 percent fall predicted by the government's preliminary forecasts. The IMF, on the other hand, predicts that the economy will grow at a rate of 11.5 percent in the next fiscal year before dropping to 6.8 percent in 2022-23. This suggests that India will continue to be the world's fastest-growing big economy in the next two years. The international body was likewise taken aback by India's second-quarter growth figures. Despite forecasts of a double- digit drop, India's GDP growth decreased by 7.5 percent in the third quarter. According to the World Bank's Global Economic Prospects, India's GDP would fall by 9.6 percent in FY 2021, owing to a sharp drop in family consumption and private investment. Growth is projected to pick up to 5.4 percent by 2021 The International Monetary Fund predicts that India's GDP would fall by 10.3 percent in the fiscal year 2021, The next year, the economy grew by 8.8 percent.

10. THE EARLY REACTION OF THE INDIAN HOME MARKET TO COVID-19 Since the Coronavirus struck the planet in December 2019, a lot has changed. Businesses worldwide ground to a standstill as governments took drastic steps to manage the virus, causing monetary authorities to reduce global growth estimates, including India's. The International Monetary Fund (IMF) claimed in its World Economic Outlook October 2020 report, headlined 'A Long and Difficult Ascent,' that the Indian economy will expand at a -10.3 percent pace in 2020, a -5.8- percentage point reduction from the agency's June projection. Following the announcement of GDP numbers for the first quarter of FY21, which indicated a 23.9 percent fall over the same quarter the previous fiscal year, global rating agencies S&P, Fitch, Moody's, Moody's, and Fitch forecasted that the Indian economy would contract by 11.5 percent and 10.5 percent, respectively, in the current fiscal. S&P Global Ratings decreased its FY21 growth prediction for India to -9 percent on September 14, 2020, from -5 percent before, as the country's infection rate reaches historic highs. "One issue impeding private sector activity is the ongoing increase of the COVID-19," said Vishrut Rana, Asia- Pacific economist at S&P Global Ratings. While the pandemic's negative impacts are already being felt throughout the world, different perspectives on COVID-19's influence on real estate are developing.

11. sector, a health emergency that compelled the world's largest work-from- home experiment, calling into question the significance of workplaces in a post-Coronavirus society. In India, where economic contraction suggests a delayed start to the long and tough path to recovery, a lengthy lockdown — which began on March 25, 2020, and was finally lifted — was implemented extended until June 7, 2020, amid a dramatic rise in the number of infections — exacerbated the situation in Asia's third-largest economy. As a result, research firms expect that the real estate boom in India would come to a standstill shortly. According to PropTiger.com data, house sales in India's eight biggest cities fell by 66 percent between July and September 2020. "Contagion has been prevalent since December 2019, but true in Asian nations only became worrisome in March 2020, whilst the Chinese economy has suffered because of the virus "The Coronavirus Effect." The closure has hurt all industries, including real estate, by effectively halting most of the country's economic activities. "Come to our site to see the attractive apartments for rent in Noida, and we will supply you with the best houses to make your dreams come true, so if you want to settle in Noida."