Impact of COVID-19 on Indian real estate

Impact of COVID-19 on Indian Real Estate

April 6, 2020|Posted in: real estate

The outbreak of Coronavirus has affected the lives of lakhs of people all over the world & it is expected to further aggravate. The World Health Organisation (WHO) has declared it as a global pandemic. The business world is severely impacted & there is great deal of uncertainty regarding trade and imports worldwide. The real estate industry in India especially Kerala is also not spared! This is really bad news for the real estate sector which has already been reeling under the previous liquidity crunch. Reductions in sales & collections of projects of villas & flats in Kerala are expected. Disruptions in project execution will also be a main outcome. The Impact of COVID-19 on Indian real estate is going to be severe.

However, construction outflows have reduced due to a slowdown in project execution activity. This will limit the overall decline in net cash flows, at least for the time being. The RBI has also declared a three-month moratorium on term loan installments. This also provides relief on overall developer cash flows during this period.

Real estate experts strongly opine that it would impact the industry indirectly, as the country is heavily dependent on imports from China for construction materials. Steel and other raw materials in the construction industry in India are to cost more.

Mile-stone based payments of projects of apartments in Kerala may get deferred and some buyers may even delay payments on account of cash crunch due to a possibility of job cuts and pay cuts as the crisis extends. 

The government has taken measures to provide some relief to the real estate sector like:  

  • Increased the threshold for initiating the default proceedings under the Insolvency and Bankruptcy Code (IBC) 2016, from Rs 1 lakh to Rs 1 Crore. This will help check on the frequent insolvency proceedings against developers. 
  • Urged the State governments to utilise Rs 31,000 crore fund for the welfare of construction workers.
  • Released a relief package to the tune of Rs 1.71 lakh crore will primarily benefit the migrant construction labourers.
  • The Reserve Bank of India (RBI) has reduced the Repo rate & the Reverse Repo rate which will lower the borrowing costs. This will help the projects delayed due to want of funds.
  • The deferment of home loan EMIs will help the borrowers and business community utilise funds for the priority activities.
  • Key filings of ITR, composition scheme, and Aadhar-Pan linkage have been deferred which will ease the burden of compliances.
  • The State governments are offering compensation to the migrant workers for the loss of employment, arranging for temporary shelters and food. 
  • The Supreme Court of India has passed a judgement to categorise the construction workers and labourers as consumers. This will ensure that no statutory benefits are denied to the labourers.

As the Corona virus is spreading, the real estate industry needs to brace itself for a drastic impact. However, we have faced similar outbreaks and successfully recovered to scale new heights. Book your apartments in Kerala through and avail great deals.




  1. Arpita jain
    April 13, 2020

    Leave a Reply

    It is an amazing article. Thank you for sharing the knowledge.

  2. DreamLand4u
    October 15, 2020

    Leave a Reply

    Great Blog!! Thanks for sharing such a great blog!

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