The COVID-19 pandemic has irreversibly changed the world order as we know it and the economy forever. We thought we lived in an adamantine world controlled by humans... until a contagion microbe – that’s killing harder and faster than any missile – showed us we obviously don’t.
Every human and business is hurting, held hostage in quarantine in the absence of a vaccine or cure, at least not yet. Real estate too is an altered reality. But for Indian real estate the changes were brought on even before the pandemic struck. It first witnessed a shift in perspective since the enforcement of the Citizen Amendment Act, which set off mayhem in New Delhi and elsewhere in the country since December.
The unrest and uncertainty propelled some resident Indians and NRIs to re-evaluate their assets in the country, and in particular real estate.
Sale listings shot up almost overnight in Mumbai, in many cases because the of very concerns related to the CAA enforcement. These fresh listings did not strictly adhere to the market reality, but veered more towards liquidating those assets at flexible, albeit profitable, prices.
No time to buy
Whenever there’s financial uncertainty, buyers across the world turn to real estate as a safe harbour, but they are definitely not going to be in any rush to buy in the time of Covid-19. There has been a sharp decline in the Mumbai’s real estate market since the last quarter of 2019. Luxury apartments in mid-town Mumbai, originally purchased at Rs140 million (Dh6.6 million) in 2015 have had no takers even at Rs90 million.
The health clearance of a broker will become as vital as that of a prospective renter-owner-buyer
And this was before COVID-19. But in a world that’s been shaken to its core, and with no definitive answers in sight, the existing parameters of real estate will change in the days to come. Virtual tours, an unheard of thing in Mumbai, have slowly started via FaceTime and WhatsApp, but it’s hard to say if that will become the norm.
Virtual show-arounds will suffice for a preliminary showing, but to make a final decision, a physical tour is a must, particularly as the amenities are a big part. The innumerable fake listings for Mumbai properties that lure in susceptible renters and buyers, will cease to exist soon enough as the health clearance of a broker will become as vital as that of a prospective ROB (renter-owner-buyer).
Health checks everyone
Brokers will by default have to become photographers and videographers, health screeners and learn how to disinfect their listed properties themselves. It will become standard practice for them to call a prospective buyer or a renter before a showing to make sure that he or she is feeling fine and has no cough or sore throat, and has not been out of the country recently - even after Covid-19 is contained. A short-term effect is that buyers will be less inclined to purchase or rent if they have no idea when they will actually get to visit the properties. The long-term effects are yet to unfold, but the virus will cripple sales despite lowered prices. There is no guarantee of buyers if self-isolation, travel bans and border closures continue indefinitely or intermittently.
I don’t see a likely upswing for the next two years at least. The economic uncertainty sparked off, along with a growing sense of unease and doomsday panic, is likely to cost the global economy $1 trillion in 2020, according to the UN’s Trade and Development Agency (UNCTAD). That may be the least of the worries.
- Rubina A. Khan is a writer and photographer based in Mumbai.