This is tough time...tougher times ahead. Matter of survival
confuses whether to be thinking for now OR, think for times beyond. I choose to
act for now but, think for beyond. Of course there are big questions and
dependencies on way to be able to peep in future and that does not stop me
from thinking. We all have been planning for retirement without knowing whether
there will be a time to retire. All planning are done Because there are
uncertainties. There is no harm in doing a Think - Exercise when we are
locked from any field action. Obviously we are tense knowing numbers and,
afraid of knowing names.
It's not for the first time in last hundred years that world
in majority at a time has not been exposed to change by epidemic, wars or other
conflicts and, evolution of technology. Yet, as I experience it closely now, I
think now. About various changes expected post Corona pandemic recovery and
normalcy phase, although I have no clue how much time it will take. What I
focus here is the business premise of Real Estate and infrastructure. As a
positive exercise, I invite opinions of people connected to these industries on
change expected in following think points:
1. Gap between Need and want for house/ commercial spaces purchase.
2. Expenditure pattern of Disposable income
3. Buyer behaviour and its influence locus
4. Supply chain reliability
5. Import/ export of goods and services and changing sources
and partners
Personally I am of the opinion is that the situation is worse for a few
industries such as Travel, Hospitality, Real estate topping the list. For Real
estate in India we already have been experiencing a few changes lately –
1. Buyers of millennial more interested in renting than
buying
2. Low cost housing doing well but, micro sizes in metros,
with ticket size of more than 40 Lakh, are not welcome.
3. Larger layouts with social amenities preferred over stand
alone buildings.
4. Tier 3 cities showing gravity for development.
5. Technology diffusion is faster.
Hence, amidst the financial crisis with lower sales
multiplying trouble for realtors, the Corona crisis comes as a big jolt.
Particularly at a time when we were about to forget de-monetization and digest
GST change. One thing is sure that issues mentioned above will be taking a
giant shape for us to ignore them. Unrest in labour segment is also not new. We
saw that at the time of de-monetization. However, this time the disbelief in
them will be rooted deeper. This will surely increase the cost provided, god
forbid, situations worsen at rural areas.
As more and more funds shall be utilized for essential item
industries, fewer funds will be available for Real estate and particularly when
market will be more vulnerable to shifting preferences in demand. Financing, as
such not my strength hence would request relevant experts to express their
views. However, one needs to be careful in analyzing the situation in longer
future. This pain that Corona is giving us, is in magnanimous proportions and
the dent in minds are going to be bigger than in physical life. I
understand that it is important when and with how much damage to lives, economy
and psych of people does this situation end. Time is rather one most important
factor. India is experiencing just a comma in life compared to many other
countries. Its not my insensitivity towards current tragedy to many thousand
families in grief. It is just a reminder to expect next big hazard on way -
economic sickness, if not collapse.
I once again invite opinions of industry people on above
mentioned five issues and changes expected. Wishing all best for their health.
Keep safe.
