The coronavirus has a great impact on every industry in the nation. It includes the commercial real estate sector too. With the massive spread of the pandemic, it is essential for everyone to understand how the properties in Chennai has impacted the housing market and how the recovery process is going to be like.
Before the outbreak of the pandemic:
Firstly, it is necessary to understand how the industry worked before the COVID-19 pandemic. Unlike the recession that happened in 2008, this time the real estate industry has taken a stronghold before the pandemic. The balance sheets, capital availability and liquidity all seem to be healthy this time. It means the companies have placed themselves in a position to manage their debts in the long run.
During the pandemic:
By the end of the second week of March, the outbreak has been declared officially. It was a quick spread by hitting all countries across the globe. Even the financial markets have started to decline sharply. Stock market rates have dropped close to 30%. Even the treasury on various bonds has declined as well. The impact on real estate was immediate. This is due to the government regulation on shut down of various trade activities and business centers.
Impact on new projects:
Those who would want to develop the new real estate project have noticed an impact on the cash flows and timelines. The slow activity involved with the housing market, a halt in the new construction and the slow demand in the new development projects have impacted the real estate to a greater extent. It has an impact on lending as well. Lenders are ready to offer attractive prices but still, when it comes to real estate industries everyone ought to walk the line with caution. Builders in Chennai took a recent survey that shows more than half of the construction firms have suspended their projects due to the COVID-19 outbreak.
Hence this pandemic has taken a different economic downturn and this pandemic is unique. Even the Budget flats in Chennai have seen a big impact. The global reaction and reach are completely different to other economic issues. The remote working lifestyle would not be able to apply to the real estate industry. The good news is that once the vaccines are available the real estate would bounce back with a greater effort.