India, like most countries, has been brought to a standstill due to the ongoing pandemic crisis. Countrywide lockdown has resulted in economic repercussions across sectors and the Indian real estate market is no exception. The question is what would be the impact of the lockdown on the industry and what would the post-lockdown scenario look like?
To understand the corona impact on real estate, let’s first look at what are the problems for the various stakeholders involved.
With both consumers and developers facing these challenges, it has, in turn, affected the market adversely. Here are the COVID-19 real estate market impact in India:
- Price correction in the ultra-luxury & luxury segments
Bound to witness a reduction in prices across the country, anything from 10 to 20 percent depending on the location, city and the demand supply situation.
- Price correction in the affordable segment
Moderate price correction along with volume correction because of significant demand erosion as the savings of people have been eroded during the lockdown
- Shift in channel spends:
Major focus on digital channels with offline channels cut off for the time being.
- Consumer sentiments:
Not as positive as before due to the possibility of construction delays, decline in new launches and also due to rising uncertainty of overall economic growth
- Shift from micro to international markets:
NRI investments may improve amid rupee fall so international markets to gain some advantage
- Investor challenges:
Restrictions and uncertainty around valuation is limiting investors’ ability to perform due diligence, and it is more challenging to execute transactions
Here are some of the proposed steps that can be taken to tackle the ongoing challenges and boosting demand.
FINANCIAL – ULTRA LUXURY & LUXURY SEGMENT
- Revival of demand:
Reducing property prices, bringing down the cost of financing or mortgage rates and introducing a better tax structure for both direct and indirect taxes
- Price guarantee option:
If prices are to come down in a few months or the buyer is to lose his job, the developer as per this scheme, will buy back the house from the buyer and also offer a 6 percent interest on the amount
- Corona insurance:
Schemes like corona insurance for the families would go a long way in addressing fear of jobs and contracting the disease
- Deferred payment plans:
Deferred payment without subvention - 10:90 plan means that the buyer may have to pay an upfront amount of 10 percent and 90 percent at the time of possession. Such payment plans may also be offered for ready-to-move-in projects.
FINANCIAL – AFFORDABLE SEGMENT
There may not be enough headroom for these segment to rationalize prices as prices have remained stable for almost five years now
- Compact units:
Developers can decide to offer well-designed compact units to fit the buyers’ pocket
Developers can also offer freebies such as GST and stamp duty waivers, additional gadgets in the house such as dishwashers thrown in, etc.
PHYSICAL TO DIGITAL
- Omni-channel strategy:
Most real estate businesses are currently highly dependent on physical visits, face-to-face discussions and transactions. It is thus imperative to increase online presence as the digital mode of business including product display, discussions, comparison and transactions is relatively less affected by such pandemic and other crisis-like situations that deter consumers from physically visiting business centers.
- Adopting MarTech Solutions:
Technology has helped elevate marketing across industries to a whole new level with the creation of MarTech. Marketing technology solutions have disrupted the marketing topography with the availability of new mediums, channels, and media types for marketers and have revolutionized marketing campaigns, marketing analysis and customer experience. With marketing being restricted to online now, real estate marketing technology like Sell.Do (complete sales & marketing automation) or IRIS (integrated online booking platform) can deliver improved conversion rates and amplified marketing ROI.
- Digital advertisements:
Highly focused messaging can be propagated through smartly targeted campaigns, content marketing, social media, etc.
- Virtual tours:
To drive consideration & engagement - a series of videos or still images along with other multimedia features such as sound effects, music, narration, and text
- Online booking:
Making the whole buying process seamless & digital to ensure smooth conversions
- Online meetings:
To interact & engage with potential homebuyers, who may transact as soon as the market returns to normalcy via webinars, etc.
- Online broker meets:
Virtual workshops can be conducted to engaged brokers & assist them in their Digital Transformation along with building their capability
- Online launches:
Launching projects online through smart targeted marketing & EOI campaigns
- Email Automation:
An efficient real estate lead generation using an email automation software with a multimedia approach
The most visible implementation of AI can be seen through the incorporation of chatbots.
Being Thoughtful As A Brand
Lastly, it is important to let your customers know that you are not trying only to sell your product but are thoughtful and understanding of the current crisis as well. It’s important to be honest, transparent and be reassuring to the stakeholders that your brand is here to stay, and will stand by them during this unfortunate & unprecedented pandemic. This also means maintaining connection with customers through relevant communication via social media platforms & other digital mediums while adapting new mediums of communications & being digitally sound.
Looking for a comprehensive digital marketing strategy to COVID 19? Being in the business from the past 10 years we have witnessed a few economic slumps and have helped numerous real estate brands come out of it as the market revived. We can help you devise the right strategy to circumvent the current slump and also thrive post-COVID. Get in touch with our growth marketing experts today, to set a plan for your real estate business.