If there's one sector of the economy which will have to deal with unheard of Multi-Whammy, it is real estate. Using "double whammy" word would have sounded too little, for, COVID-19 pounding would leave a cavity that would take long time to heal.
The most unfortunate part is that the long wait for revival, punctuated by the trio of Demo-Gst-Rera, actually ended up with a massive tumble due to COVID-19. However, good news is that it can't go below this. Nothing can go worse than complete halt. Now the choice between Re-Start and Re-Boot lies with the developer. Tech savvy would know the difference between the two.
In my previous blog i placed before you factors that will help turn around the industry. However, one must bear in mind that post COVID-19, the industry will never be the same again. Let's examine the changes that we will have to live with hereafter.
CONSOLIDATION.
First and foremost, what the advent of Rera initiated, COVID-19 will accomplish. Corporate and big family run developers will continue while small and medium enterprises will fall aside.
TOPLINE
Topline will taper off as there will be tremendous pressure on selling price and sales volume.
OPERATIONS
If not all, most operational aspects of real estate business have to be brought under Standard Operating Practices to sustain and survive future shocks.
COSTS
Since the selling price will be decided by the customer, the developer will have to focus on his KITCHEN to manage and achieve cost efficiency. Wafers will be thicker than profits in the days to come. Cook will decide the margins.
HUMAN RESOURCE
Jumbo size teams with astronomical pay packets will be thing of past. Partially outsourcing of activities like Marketing and Sales, HR, Finance and accounts, Construction with material will directly or indirectly save time, energy, space, money and other resources.
BOTTOMLINE
Most developers will struggle to be out of red zone. The high cost of finance will have already eaten into the future profits of the project.
Therefore, the only place the developers can look for profits, is their own KITCHEN. Cook a quick meal with good but inexpensive ingredients, serve it hot to the customer and he will pay you right price!
HAPPY COOKING.
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