Impact of COVID-19 on Real Estate and Construction JobsMay 20, 2022 2022-05-20 12:58
Impact of COVID-19 on Real Estate and Construction Jobs
In 2016, the real estate industry witnessed three significant events. The first one was the enforcement of the Real Estate Regulation Act in March and the second one, which wasn’t just an event but a blow – demonetization. The third one – GST! All these initiatives had positive as well as negative impacts on the otherwise conventionally run real estate and construction sector. After that, real estate changed significantly. Companies started to align themselves to keep up with the changing dynamics of the trade.
However, little did real estate players know that early 2020 would have something even more impactful – a setback that would change every equation and alter the math of the real estate sector. Of course, we are referring to the pandemic that wreaked havoc on the construction and real estate sector. Construction activities came to a complete halt. Sales figures plummeted, and many across the country lost jobs.
Employee Strength of India’s Real Estate Sector
India’s real estate business is one of the most significant employers across the country. The sector employs around six to seven million people. Additionally, around three lakh people are indulged in white-collared jobs. However, besides people directly employed, the sector has millions engaged in allied jobs and businesses such as material supply, labor provision, etc.
Impact of the Pandemic on Real Estate and Construction
The pandemic had a profound impact on the real estate sector. But it wasn’t only real estate sales that suffered. The rapid spread of the pandemic and the resultant lockdown halted construction activities across the country. That, in turn, resulted in increased operational costs, labor issues, interest build-up, etc., and many other issues at the individual level that made it difficult for many players to survive, let alone revive.
The situation further worsened when the first lockdown was extended. Many companies decided to slash salaries. Many others opted for layoffs. Thousands were rendered jobless and left in despair. Circumstances remained unchanged for almost six to seven months after the first lockdown. Survival became even more challenging for many. A lot of real estate developers had to close their offices!
According to reports, before COVID-19, job losses across the real estate sector amounted to around 14-16. However, during the pandemic, the industry feared the number to increase as much as 24-26 percent!
The situation started returning to normalcy after December 2020, when the first wave subsided, and news about the COVID-19 vaccine started flashing worldwide. Many companies resumed construction activities, albeit a bit slowly and with a lesser workforce (as many had already fled to their native places in Uttar Pradesh, Bihar, Karnataka, etc., during the lockdown).
What is the Situation Today?
Today, the situation has improved considerably. Many real estate companies have revived. They have called many of their employees back and brought salaries back to normal. However, many companies haven’t conducted appraisals since the pandemic! Many do not seem to be upset with this, though, as a lot of them either have got their jobs back and many have started to receive pre-pandemic salaries.
Real estate companies might have faced the worst situation during the pandemic. However, they never lost hope. While many had to stop construction, several were left in an absurd situation, where they had already built structures, but didn’t have anyone approaching to buy offices or homes. As a result, many of their spaces remained empty for a long time.
Nevertheless, lately, the situation has improved further in 2022. People have started investing in homes and commercial spaces. Real estate developers have once again started to receive leads and inquiries. Many of them have been converted. To know about real estate sales across various important cities of India, read Post Pandemic Growth of Real Estate and Construction Industry in India.
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