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Focus Goa: Real Estate
The Realities of Real Estate in times of COVID -19 The real estate space across the globe has suffered immense blows, this time owing to the COVID-19 pandemic; however, the sector in Goa is looking optimistically at the days to come
By ameya nayak
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While the ongoing Corona virus pandemic has taken almost every aspect of life for a toss, the nationwide lockdown that followed has drastically stalled major business sectors across India, setting aside essential services. More importantly, a major sector that has faced uncertainty is real estate. The sector across the country, which was one of the top contributors to the nation’s economic growth, has seen a considerable stand still since over a billion people went under severe restrictions since the lockdown was first imposed.
While most realtors across India feel that property prices may witness a fall of about 10 to 20% across locations, the prices of land could see an even bigger fall of about 30% – making this, one of the worst corrections ever since any global financial crisis has occurred.
It is no surprise that the real estate sector has been going through a rough patch for a couple of years now; beginning with demonetisation, the coming in of GST, and RERA in 2016 and the latest being the ongoing COVID-19 pandemic.
Undoubtedly, COVID has led to absolute desolation of real estate with several construction activities
coming to an abrupt halt. While various realtors in Goa believe that property sales have dipped by up to 60%, they are of the general opinion that elevated dependence on supply chains, labourers migrating, increasing costs and liquidity related concerns are some of the major challenges that this sector has been dealing with. As far as new projects are concerned, the real estate stakeholders in the State have admitted that there have been very few novel projects that have been undertaken by this sector since the beginning of 2020.
Offering her insights into the current realty situation in Goa, well-known realtor Audrey Menezes of Dina Real Estate & Hotel Consultants says that people tend to think negatively on how the pandemic has affected real estate on the down side; but surprisingly, properties in Goa especially rentals with respect to residential high end properties have been displaying immense demand with there being a flood of enquiries to get a hold of such properties. Further, such rentals or re-location on part of the purchasers is not because of loss of jobs or employment but more so because people feel the need to have a better life.
“Initially, during the lockdown, clients would want to rent properties in Goa for 2-3 months. However, now her clientele has been approaching her with offers to rent properties for as long as an entire year to try it out and many have also been considering moving to Goa, more so because the pandemic has made the world realize the practicality of the concept of ‘work from home’ which means they could still have their jobs but work from any location”, says Audrey.
She further mentions that, as far as demand between rental and purchase is concerned, the demand for rentals is way higher in comparison to outright purchases especially for houses and fully furnished homes rather than office spaces. While 80% of the buyers are looking for
Denzil Xavier
Real Estate Consultant “Various Government employees who had plans to purchase property have had to shelve their plans as the Government offered loan scheme has been discontinued. To make it worse, various employees have also lost their jobs and are facing severe pay cuts that has directly and indirectly affected the market”
Nilesh Salkar
President, creda i - goa
fully furnished homes, the remaining 20% are interested in semi-furnished or non furnished home/ apartments. Most homes being rented are in the range of `60,000 to 1 lakh and many going up to 1.5 lakhs and in certain cases even up to 4 lakhs rental per month.
According to Audrey, the strategy to keep real estate in Goa on the go is based on the ideology of people across the country and for that matter, the globe – of moving to Goa, even if we are struck by COVID. Nevertheless, that has not affected the quality of life in the state.
Geographically speaking, Audrey mentions having almost no enquiries for properties in South Goa which means that the demand is mostly in the Northern district with the highest demand being for plots ‘with a
view’ or luxury plots specially from the out-of-State clientele who fall within the bracket of HNI or the affluent Indians.
In her view, the reason behind the demand for properties in Goa is because people in Goa tend to handle situations differently, be more cautious, take precautions to remain safe during pandemics and yet balance that with good quality life by venturing out of the homes with social distancing in place. She mentions how there is an increasing need to streamline the field of real estate and buy only from established and genuine realtors who are part of the Goa Association of Realtors, whose members believe in fair practices whether with the quality of the property or the pricing. She feels that the real estate scenario in an aesthetically pleasing state like Goa is only going to get better and hopefully, Goa will manage to sell a lot of the unsold inventory especially the medium sized homes.
In another view, eminent realtor, Denzil Xavier, said that the global COVID pandemic has, needless to say, adversely affected all businesses and cash flows, with real estate industry being no exception to the same.
According to Denzil, some of the prime casualties that the real estate sector in Goa is currently dealing with include: a. Delay in completion of under-construction projects that have come to a complete standstill and post the lockdown, developers are taking time to restart fullfledged operations owing to labour constraints in Goa. b. Dip in sales and deferred launch of new projects that has in turn postponed decision to purchase real estate in this uncertain atmosphere. c. Negligible impact on price in Goa as the state has witnessed less volatility during these tough times compared to the rest of India. Therefore, considering the fact that Goa is a much sought-after destination for property shopping, the prices especially of land are expected to remain stagnant in the short term. The pricing of built-up spaces both residential and commercial however, has been affected to a certain extent, especially in the secondary market due to various factors, mainly economical. d. Major impact on commercial real estate leasing due to restructuring and closure of businesses. Businesses are cutting their losses till such time the whole pandemic is over and done with. The food & beverage industry and tourism sector being severely impacted due to shutdown of business, this has led to cancellation or restructuring of long-term leases.
However, Denzil also says that there have been a couple of positive developments emerging from mid-April, as his firm has been receiving enquiries from NRIs and second home buyers who have been looking to settle down in Goa. Offering his suggestions to keep the real estate scenario in Goa afloat, Denzil says, “Indian industry is expected to see a surge once the pandemic ends and so will the real estate sector in Goa. There is no place like Goa in India. Goa is emerging to be a favourite destination for postretirement living or just a holiday home, among the top honchos of Indian Industry!”
“During the last few months of the pandemic, if one goes by the status of the enquiries that we have received, there seems to be a demand picking up for independent villas with spacious gardens and with picturesque views of the water bodies, fields or just greenery or similar villas in gated complexes having low density of the number of units. Therefore, it is imperative that Goa’s environment, both natural and social is protected at all times and only then, will
Audrey Menezes
Dina Real Estate and Hotel Consultants
we be able to achieve more value for our real estate”, adds Denzil.
Nilesh Salkar, President of CREDAI opines that the realty market is slowly showing improvement but cannot really be labeled as fully healthy yet. “New sales in the past 3-4 months have been sliced to half of what used to occur before COVID happened. Various Government employees who had plans to purchase property have had to shelve their plans as the Government offered loan scheme has been discontinued. To make it worse, various employees have also lost their jobs and are facing severe pay cuts that has directly and indirectly affected the market”, he adds.
All in all, while the real estate scene in the State is currently a varied one, it is expected to be more or less optimistic for investors as well as realtors. However, reputed real estate consultants and developers with a credible standing in the market are more likely to achieve an elevated grip on the business with prospective buyers and property investors, in the milieu of this predicament
