Coronavirus seems to be posing a major threat to humanity. As the overall affected number of people crosses 90, 000 across 73 countries, there is hardly any market or sector that is left untouched.
In India, the overall impact will be limited unless the outbreak lasts longer than anticipated. As far as the real estate segment is concerned, experts reportedly feel that the pandemic will have hardly any impact on the domestic market. According to a report by CBRE, there has been no material impact thus far on the retail market.
“Both physical retail and online retail continue to witness growth in key retail markets as more global retail brands enter and expand,” says the report titled Why the Corona Virus Outbreak Could Have a Lasting Impact on Asia-Pacific Real Estate.
Commercial real estate segment is also expected to remain unaffected. The segment which is feeling the jitters of coronavirus is the luxury real housing segment.
Affect of Coronavirus on Global Luxury Real Estate
Chinese are known to be one of the biggest and most enthusiastic buyers of luxury homes across the world, especially in Europe and North America. While Europeans collect vintage cars and artefacts, Chinese are known to acquire luxury properties as second homes owing to lifestyle status and value appreciation.
Since China is the epicenter of coronavirus pandemic, luxury housing is expected to feel the jitters globally. There will be less motivation among the Chinese buyers to acquire new properties for some time to come and if the problem persists, the impacts will be more and serious.
Affect of Coronavirus on Indian Luxury Real Estate
While India is not a market for Chinese when it comes to luxury homes, the pandemic is still going to have ripple effects in this segment.
High-end luxury real estate relies heavily on import of fixtures and furniture from China. Since imports from China have slowed down as a result of the unprecedented situation arising from the coronavirus pandemic, a sense of uncertainty can be seen looming over the luxury real estate where most of the homes come with interiors and fancy fixtures.
“When we look at possession dates as also the ongoing interior work in the luxury real estate segment, these are definitely going to be delayed. Supply of fixtures, furniture and fittings used in luxury housing in India is also imported from China and will be impacted,” Money Control quoted Niranjan Hiranandani, president (National) NAREDCO as also President, ASSOCHAM, as saying.
To add on the woe, there are no alternative sourcing options for the fixtures, furniture and fittings at the price contracted with Chinese manufacturers. If the pandemic fear continues to persist for a long time, the developers will have to figure out other options while taking the hit on the price differentiation.
Click here for CBRE’s Why the Corona Virus Outbreak Could Have a Lasting Impact on Asia-Pacific Real Estate report.