Real Estate and the pandemic: A call for affordable housing

The real estate sector has recently been in news a lot lately owing to the fall in their sales figure due to Covid 19. Since the pandemic has hit the Nation, the question is not- when people will start investing in real estate again but the question is how the people will buy. Amid the pandemic, the consumer preferences have significantly changed during such tough times. The consumers are now more conservative with their spending and hence the discretionary expenditures have significantly decreased. According to the recent research by Knight Frank India, the YoY decrease in sales of residential properties hit 54% which may be the worst one in the decade. This data clearly shows how people are being evaluative about their spending.

Housing sector in India, according to me had long abandoned the idea of creating affordable homes. The prices went up so high along with the demand and availability of loans that the model of business kind of formed an unsustainable bubble that was ought to burst at some point of time. The valuations stood way high than normal and so the demand. But now, perhaps the pandemic has pulled the reins. The realtors are decreasing prices to get rid of unsold inventories as people are spending more on essential products, healthcare and on insurances rather than on investing in real estates. The consumers now would prefer to save the discretionary portion being panic stricken in such situation. With such situation in hand, the pricing model of the housing projects will hopefully change and the prices will hopefully come down. I sincerely hope that the realtors will understand the fact that selling home at a price of 50L or 60L actually act as a burden on the Indian middle class consumers and the burden of repayment of the loan taken to purchase the house goes on for years and years. Sadly enough these days, the condition of the customers after buying a house is as stressful as not having one. The realtors must understand that the pandemic has taught the people the difference between luxury and need and they must focus on creating affordable housing without compromising on quality. This might help the real estate sector to get back on feet sooner than expected even in the presence of the pandemic.