Impact of Coronavirus outbreak on Indian Real Estate.
Coronavirus has infected more than 140,214 people worldwide and has claimed over 5,123 lives. With the World Health Organisation (WHO) declaring it a global health emergency, the business sentiment is severely impacted. The outbreak has created a great deal of uncertainty regarding trade and imports, not only in China but worldwide. The real estate industry is also not spared. The traders are wary of visiting mainland China and are sceptical of reduced production in the coming months. This will have a direct bearing on the prices of steel and other articles used in the construction industry in India.
At a production capacity of 928.38 million ton (MT) in 2018, China remained the largest producer of steel. Although India is the second-largest producer, it lags severely in terms of production capacity, which stands at 106 million ton. This heavy reliance on China for steel and steel products is a cause of concern for the industry. With production in China going down, the prices in the allied industries are bound to increase, thereby increasing the costs and reducing the profit margins of real estate developers in India. The slowdown in the construction industry in China will have downward price pressure on global metal prices.
This might turn out to be a boon for many companies as they can promote the #MakeInIndia campaign and increase the production capacity of steel, significantly. The government will also be very supportive of the moves and huge benefits and compensations will be made.