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The road to recovery for India’s real estate sector must involve concerted action from all stakeholders, especially since the real estate sector is a significant contributor to India’s overall economic growth and is the second-largest employer in India. Although the real estate sector has been reeling from a slowdown and liquidity shortage over the past few years, it has also witnessed transformative reforms in recent years that have laid the foundation for massive growth ahead. However, the emergence of the COVID-19 pandemic has halted any momentum that was being built as a result of the policy reforms.
As the sector moves forward, the need of the hour will be to closely look at some of the key elements and accordingly think, re-think, improvise, adopt and adapt certain aspects, for quick revival. Here are few crucial aspects that will impact the growth of the sector:
Keeping the best interests of the workforce in mind
Employee welfare should be the top-most priority for the real estate sector, as operations resume after the lockdown. Developers must revisit their standard operating procedures and adopt new methods that enhance efficiency, while minimising the chances for contamination. They will have to devise a pandemic contingency plan, specifically addressing bottlenecks that occur due to a widespread crisis, such as employee health monitoring, absenteeism, remote working and travel restrictions.
Keeping ahead of the digitisation curve
The need for operational efficiency and digital transformation, can no longer be taken for granted. It is imperative to ensure a complete restructuring of technology both, at the front and back end. It is an opportune time for previous industry practices to be reassessed and for new systems to be introduced, including artificial intelligence (AI) and data analytics. This applies to all parts of the sector such as ERP, project management and customer service. Virtual offices and the capacity for remote working, will prove to be advantageous for real estate developers that adopt it, as they will not be restrained by potential travel restrictions. Daily operations, training and development programmes would continue unimpeded.
Ensuring a personalised connect with the consumers
Maintaining communication with customers is important for a strong sales pipeline. This is especially true, when face-to-face interactions and site visits are limited. Having a robust IT and digital infrastructure, will offer real estate players an added advantage of allowing personalised and precise communication with potential customers. Adopting a digital-first marketing strategy, will result in a more immersive and responsive consumer experience.
More reforms from the government
The recently announced relief measures for the real estate sector in light of the pandemic are helpful but they are not a long-term solution. Much more intervention is required. For example, preserving liquidity for operations and relaxing delivery timelines, will allow developers to focus on completion of projects without any added burden. While some negative aspects of the lockdown will be mitigated, more fundamental sector-wide changes must be seen. Over the long term, it is important to lay the foundation, which will provide a strong impetus for growth. Government policies must address raw material price escalations, input tax credits and reduction in GST rates.
Immediately implementing announced reforms
The government has recently announced multiple reforms, to address the concerns of the sector. However, just announcing them will not be adequate. The positive initiatives, including the relief funds, loan moratorium and repo rate cuts, must be realised immediately. The repo rate cuts are a positive move but the transmission of these rate cuts must be implemented with immediate effect, to bolster the sector. Swift implementation of the relief measures will also boost consumer confidence.
Moving forward, the real estate sector requires supportive measures that will improve upon the policy reforms. At the forefront of these measures, is the granting of infrastructure status to the whole real estate sector. We have all witnessed the impact of infrastructure status on affordable housing, with many reputed developers having successfully launched projects in this segment. The sector will also benefit heavily from a streamlined approval process, with single-window clearance. This will allow project approvals to be processed more efficiently, resulting in lower construction costs, thereby, reducing overall property costs. These measures will curtail the slowdown, generate demand and revive the market.
(The writer is director, Aparna Constructions & Estates)