Covid-19 and Indian Real Estate – A Paradigm Shift?
India has now entered an extended lockdown period which the government plans to enforce till 3rd May. The impact of this exercise will not be visible immediately; however, the challenges of ensuring minimal contact between the populous may have left the central and state authorities with no other alternative to achieve their goal: social distancing.
What is social distancing? According to the Merriam Webster dictionary:
“the practice of maintaining a greater than usual physical distance from other people or avoiding direct contact with people or objects in public places during the outbreak of a contagious disease in order to minimize exposure and reduce transmission of infection”
Such a measure, therefore, is a necessity to fight the spread of an infectious disease. But what impact will this have in the future? Will we resume taking our surrounding environment for granted once again, thereby creating a window for such a pandemic to repeat?
More specifically, what could be the potential impact of the purchase and inspection process for the real estate market in India? The Indian buyer has traditionally been oriented towards the “look and feel” of a property. The purchase process for the buyer of a new project can be summarized as follows:
From the above steps, site visits are generally accepted as common practice which customers undertake to ascertain the construction stage and quality of materials before commencing further. The Covid-19 virus has now thrust a potential paradigm shift onto the real estate, wherein the buyers are now unable to visit the site until the lockdown has been lifted.
Real Estate developers and agents are now adopting digital strategies and innovative sales techniques in order to capture their target audience. Online product launches, EOI via payment apps, video interactions for final discussions and brand outreach is the new order of the day.
The Impact for Real Estate Developers
Developers are faced with a unique challenge: reaching out to their target audience and ensure a sales velocity. The lockdown has acted as a catalyst wherein, in order to ensure survival in a tough market scenario, developers are embracing digitalisation of their processes.
As several people continue to work from home on a daily basis in the wake of the quarantine, every aspect of the sales experience has now been given a “virtual boost” so that the customer can make an informed decision before committing their hard earned money.
Measures such as: -
These measures are being undertaken to provide a safeguard of the customers interest and allowing them to make an informed decision. Additionally, the interaction with the brand allows the customer to understand the developer profile in detail.
The adoption of such measures may increase significantly in the years to come as people will prefer to take all the information over the internet or through their digital interactions and take their decisions without even visiting the site until much later!
The brand of the developer, in such an instance, will provide comfort to the customers as the effort of reaching out and providing a seamless experience can bode well for all parties involved.
The Impact for Real Estate Agents
Where the real estate developer’s outreach is limited, the agent fills the gap by creating an opportunity for the interaction – either digitally or telephonically.
The agent will remain a valuable source for local knowledge for their potential customers, even once the lockdown is lifted. A customer may not necessarily visit the site, but the agent will remain the one on the ground conducting site visits on a regular basis.
The agent will: -
The agent’s own reputation will also act as a safeguard for buyers to utilise their services in the future. If buyers intend to rent out their premises or wish to rent out a property, agents can remain as the first point of contact for any party. The agent must also, therefore, maintain a high level of hygiene in order to gain their trust for daily interaction and site visits.
Eventually, agents will also have to adopt tech-savvy measures to effectively service the secondary / resale market. The tech-savvy measures, combined with a high sense of personal hygiene & their reputation, will be the benchmarks of their services for the coming years.
The Impact for Customers
Customers stand to gain with the current lockdown, as developers will be competing for their attention and interest. As the market was facing a slowdown prior to Covid-19, the outreach by sellers will increase dramatically via the digital and traditional advertising mediums.
Additionally, customers will also be able to take an advantage of the pricing that is prevalent in the market. The influx of supply from the resale market will also contribute towards the market remaining soft for the foreseeable future.
However, customers should take care to avoid getting bogged down with too much information and spreading themselves thin by looking at every opportunity that may come their way. Constantly searching for the best deal in such a market can often be too much of a good thing.
Customers should retain their focus on the primary drivers of their decision:
With a focus on the above factors, customers will be able to filter the best suited options for them and then take advantage of the platforms offered by developers, sellers and real estate agents in order to make a well informed decision.
The impact of Covid 19 on the entire Indian economy and the Indian real estate is definitely going to be huge. There will be a lot of factors that will keep on emerging and evolving as the effects of this pandemic unravel over the course of time. Any real estate business in India that wants to survive and also grow during and after the Coronavirus pandemic will have to have the courage to be adaptable and the humility to be flexible. Every real estate developer in India will have to develop a deeper sense of empathy and understanding towards the customers. Also the adoption of new technologies that will help clients have access to the information of a certain real estate project has to be swift. Communication, payment methodologies and all other aspects of client interactions will have to be upgraded using the latest technology to instil a sense of confidence in the buyers.
Every real estate agent in India will have to upgrade his technological skills to ensure the best possible and relevant real estate service to clients. One thing is for sure that real estate marketing in India is set to undergo a major change post the Coronavirus pandemic. It will be difficult to measure or quantify the nature of these changes but like everything else this will bring challenges & opportunities. Every prudent real estate business in India that wishes to capitalize should get their thinking caps and their dancing shoes on. It is going to be show time soon.
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