Envisaging The New Normal For Real Estate

With the onset of the COVID-19 pandemic, which has now turned into a global phenomenon, there have been sudden and significant changes in the human lifestyle.

Today, approximately 2.6 billion people are living under some sort of lockdown or quarantine, with offices and shops closed, and production stalled. Thus, all this has affected, more or else, every sector involving trade and investment, directly or indirectly.

But, along with analyzing the present effects on every sector, it is imperative to discuss and strategize the ways and means to adopt the new normal, post the pandemic period. Be it the education sector, the foreign exchange, or the real estate now is the time to find sustainable solutions to the pounding questions.

Commercial real estate is considered to be more lucrative and reliable, than investments done in residential property. It is so, simply because long term associations with different corporate firms and tech giants reap greater benefits and has greater investment security, in comparison to, when dealing with residential plots. Not only this, commercial dealings often open new ways and means to expand the real estate business through different means and modes of networking. But, in the modern scenario, it is very intriguing to see how the tables are turning gradually.

Commercial vs. Residential Real Estate

The Work from Home culture is something which has become a necessity today, in order to stay safe and to work in simultaneity. But, owing to this trend, commercial real estate finds itself in a difficult situation. With a huge stratum of people working from home, medium to large corporate firms are gradually working upon their decision to reduce office space. Not only this, some of India’s top corporate companies today, are also thinking of surrendering a major part of their rented premise space in an attempt to implement the culture of work from home for their employees, even post the pandemic period. And so, amidst all these, commercial real estate is expected to face a toll.

However, just like what appears stagnant may not be from within, similarly, the real estate sector, as a whole, will not crash. Soon, redesigning of office spaces to ensure proper social distancing norms would have to be implemented, for which an important factor is the availability of space. Not only this, with more and more employees adapting to the work from home culture, the need of transforming houses to functional work spaces will lead to an exponential rise in the demand for bigger, more spacious, and more flexible houses. However, in contrast to this, in view of the salary cuts and jobs lost due to the pandemic, another trend that appears to be predominant is the choice of the common man to shift to smaller houses from bigger ones. This will, definitely, lead to a sharp rise in the investments made in residential property.

Thus, looking at the scenario holistically, the sector of commercial real estate will definitely experience a phase of stagnancy but won’t take a backseat. Not only this, but the substantial increase in the investments in residential plots will also help the real estate sector to re-enter into the post-pandemic period, and uphold it well as it accepts the norms of the new normal.

Property: Key trends seen in 2020