Some of the key thoughts about the real estate industry that is currently ongoing. The fate of the industry is though uncertain but relying on qualitative and quantitative data all we can do is hope for the best until the dust settles :
- Social and professional ‘distancing’, desertion and illness are likely to cause disruption and present a potential impediment to operations and sales. Buildings can act as barriers to contamination. In the long run, ‘building health’ (including building ventilation, air filtration, and cleaning) and facilities/management preparedness will all become increasingly important. The requirement for the cleanliness of buildings will arise simultaneously with smart monitoring of homes or rather smart homes.
- Real Estate agents have started focussing on increased hygiene and cleaning measures on-site and consider waste management, and considering to bring in more outdoor air into buildings with heating and ventilation systems (or opening windows in buildings) to help dilute airborne contaminants. An uptick in workplace technology usage – sensors, air quality and occupancy indicators to enhance workplace safety
- There is a hit in the interest rate volatility and according to CNBC prediction, it could reach as low as 0%. It is impacting lenders in the US where the marketplace is highly turbulent and struggling over fixing of prices of the ongoing and upcoming projects. Investors are expected to shift towards higher defensive assets and sectors. There is a huge decrease in the sale of property in the US mainly by the rich Chinese people. A drop of almost 56% has occurred even before the COVID19 has struck on its full pace.
- U.S. mortgage rates popped an all-time low in early March, with the average rate of the 30-year fixed-rate mortgage dropping to a staggering 3.29%. This will enable defaulters to repay their loans at a low-interest rate.
- In the short term, occupancy rates will decline. Areas with a huge proportion of international visitors are most bared, whilst locations accessible to a domestic public by car or public transport may benefit. For example nearby beaches or weekend spots. The Hotel Sector will have to rely on domestic occupancy but that also depends on the restrictions put on by the government. Currently, OYO has started partnering with some properties to lend it out the people who want to self-quarantine themselves by paying some extra bucks.
- Retailers with the infrastructure to fulfil online orders through home delivery are currently being perceived as beneficiaries as more customers are going online shopping. More Focus will be placed to shift towards a flexible omnichannel retail model and sustainable fulfilment. In the long run, many retailers are anticipated to rethink their supply chains to ensure continuity of their operations and to mitigate risks of future shocks. Actions to improve sustainability performance and limit the environmental impact of wider operations, retailers may opt to produce and house more stock locally. This may boost additional demand for logistics space and/or expand existing store networks. There will be more demand in logistic space especially for groceries as many will now prefer shopping online permanently.
- There will be a significant increase in near sourcing of manufacturing. This will potentially lead to reduced container flows at major gateway ports and lower warehouse demand in these locations. Technology will be essential to secure greater supply chain clarity to accomplish this. Also, firms may decide to increase their inventory levels (especially for the ones who follow periodic inventory levels) to prepare themselves from such situations and thus would lead to increased demand in warehousing space.
- Office utilisation rates will decline as remote working rises, and landlords with vulnerability to short-term leases are the most exposed.
- There will be an increase in Virtual tours of the current ongoing projects. Real Estate agents are trying to implement virtual tours by the use of videos and animated graphics to advertise or showcase their projects to prospective clients via Instagram, Facebook Live, Youtube and WhatsApp. Undoubtedly there will be more online property selling platform to come up and existing ones to revamp their website to deliver a better consumer experience.
- Cold-calling, E-mailing, and texting is becoming widely utilised to handle sales queries. The dealers are trying all the cutting-edge technologies to sustain within the reality industry amid the outbreak of coronavirus. This has also been told to the NY real estate dealers by the New York State Association of Realtors. Also, the state has extended the date to June 20 to pay their rents for the commercial and residential spaces. But, Thousands will face eviction once the moratorium is lifted, triggering mass displacement and skyrocketing New York’s homeless population
- Once this pandemic goes over, there will be an increase in the sale of Household space in less dense areas and hence there will be an expansion in the extended parts of the city. People will move from denser parts to less dense parts to avoid social distancing. New businesses will eventually come up when expansion occurs.