The recent outbreak of COVID-19 has brought about a significant decline in the Indian economy. The pandemic has created a domino effect of disruptions, with a marked decrease in demand, a dismantled supply chain, and a severely impacted real estate sector. The industry is currently facing two pressing challenges: lead generation and retention. Property owners are struggling to restore leasing activities, capitalize on investment opportunities, and maintain strong financial ratios. The decline in transaction volumes has necessitated a rapid adaptation to new technologies, in order to stay ahead of the curve and meet the changing needs of the market.
Observing the Trends
Paramantra’s cutting-edge Real Estate CRM system has conducted a thorough analysis of data collected from one of our esteemed real estate clients. The results of the analysis provide a comprehensive insight into the changes in the industry in response to the COVID-19 pandemic. The data were evaluated in two distinct phases, the pre-COVID phase, and the post-COVID phase, with July, August, and September representing the post-COVID phase. The analysis revealed a reduction in the average number of incoming calls during the post-COVID phase, compared to the pre-COVID phase, represented by January, February, and March. The findings indicate that the average number of calls reached its highest point between 9:00 AM and 1:00 PM.
The post-COVID phase has shown a slow but steady increase in the average number of calls, as the real estate sector begins to recover from the impacts of the pandemic. However, the data reveals that the maximum average number of calls were recorded at 27, around 10:00 AM. This gradually decreases to 16 at around 3:00 PM, reflecting the repercussions of the widespread shift to remote work. This trend is further indicative of the slow recovery that the economy is undergoing. The analysis suggests that this delayed recovery is the result of a combination of government regulations and rising property prices, which have led to decreased purchasing power among consumers facing job loss and pay cuts. As a result, the propensity to purchase or rent property has declined.
Prospective home buyers are holding off on their property purchase decisions, as they await greater stability in terms of job security. This uncertainty has induced a shift in their purchasing decisions, leading them to defer their investments. The real estate market, as a result, is suffering, with a delay in the supply of construction materials exacerbating the timeline of ongoing projects. Given the financial uncertainty that prevails, individuals are wary of committing significant capital to large investments. As a result, the market is grappling with a slowdown, as cautious consumers wait for conditions to improve.
Fig. 1 (left): Average incoming calls from customers received by our top real estate clients during Jan-Feb-Mar Quarter (pre-COVID)
Fig. 2 (right): Average incoming calls from customers received by our top real estate clients during Jul-Aug-Sep Quarter (post-COVID)
Slow and Steady
One of the persistent challenges faced by the real estate sector is low lead generation. Further analysis of the data reveals a decrease in the number of leads generated. In February 2020, the average number of leads recorded was 1368, with the lowest number being recorded in May. However, by mid-August, the average number of leads had increased to 1030. The pandemic has cultivated a heightened appreciation for home ownership among buyers, providing a modest boost to the residential real estate market. The increasing digitization of the real estate sector has opened up new avenues for exploration, offering consumers greater choice and flexibility. While physical site visits will always remain an important aspect of the real estate industry, developers are increasingly turning to virtual tours and online property registrations to reach a wider audience. The digitization of the real estate sector has made house-hunting easier and more accessible, as consumers are able to explore properties from the comfort of their own homes.
The trends indicate a gradual increase in the average number of leads generated from July to September, likely due to declining home loan interest rates and moratorium interest reliefs, which have encouraged prospective home buyers to make inquiries about properties. However, the data clearly shows that a return to pre-COVID levels will still require a significant amount of time. The pandemic-induced migration has also contributed to the change in trend, as consumers are increasingly opting for less expensive homes in their hometowns over expensive urban locations. Furthermore, there has been a decline in foot traffic in commercial centers such as malls, retail outlets, and entertainment venues, directly impacting commercial real estate deals.
Fig. 3: Month-wise Average Lead Generation of our top Real Estate clients
Scaling the loss
The outbreak of the virus occurred at a crucial time for the Indian Economy, with the real estate sector undergoing statutory payouts and balance sheet reorganization. Despite the gradual return to work, remote work is likely to remain a permanent fixture. The growing significance of homeownership among buyers provides a pathway for the real estate sector to recover. As the market begins to recover, its effects will also be reflected in the real estate sector, through streamlined construction pricing, improved project timelines, and increased commercial deal closures. The real estate sector is making a slow recovery, but is already taking proactive measures to prepare for any future impact from pandemics.
