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Anarock, a prominent real estate consultancy firm, indicated that housing sales in north India could witness a short-term decline of 5-10 per cent of the ongoing conflict between India and Pakistan intensifies. The demand for office and retail spaces may also experience temporary disruptions, although a major downturn is not anticipated. The consultant highlighted potential delays in luxury housing purchases, while mid-income housing is expected to recover first once stability is restored. Additionally, retail footfall in shopping malls may drop, and hotel occupancies in affected regions like Delhi and Kashmir might decline by 10-15 per cent. However, a surge in domestic leisure travel is projected once tensions subside.
Housing sales in north India may face a temporary decline of 5-10 per cent if the current conflict between India and Pakistan escalates, as per a report by Anarock, a leading real estate consultancy firm. The firm stated that demand for office and retail spaces might also be impacted in the short term, but an outright slump is unlikely. Advertisement
Anarock's Regional Director and Head of Research, Prashant Thakur, remarked that the potential broadening of the conflict could lead to several ramifications for the real estate sector. He stated that wars often stall construction activities and erode both end-user and investor confidence. Thakur noted that potential homebuyers might postpone their purchasing decisions, while retailers could temporarily halt their expansion plans. However, he emphasised that the real estate market is known for its resilience, often bouncing back after a brief pause.
In the residential segment, sales in Delhi-NCR and other parts of north India may dip by 5-10 per cent in the short term. Thakur observed that luxury housing buyers typically delay their purchases during periods of uncertainty. Conversely, mid-income housing is expected to recover first once normalcy resumes. Meanwhile, prices of construction materials like cement and steel are likely to remain elevated over the medium term unless government intervention is introduced.
Regarding office demand, Anarock suggested that multinational corporations might temporarily hold back their entry or expansion plans in India if the conflict prolongs. This could lead to a short-term decline in absorption rates; however, long-term demand, particularly from GCC, BFSI, and IT sectors, is expected to rebound within the next 12 months.
Retail footfall in shopping malls might also decline as consumers exercise caution amid the uncertainty. Nevertheless, Anarock expressed optimism that Indian retailers, having adapted to challenging market conditions during the Covid-19 pandemic, would likely employ creative promotions to attract customers once the situation stabilises.
In the hospitality sector, regions such as Delhi and Kashmir could witness a 10-15 per cent drop in hotel occupancies if the conflict persists. However, domestic leisure travel, which comprises approximately 90 per cent of room-nights, is projected to recover swiftly. Anarock also predicted a potential surge in 'victory tourism' similar to what was seen in Kargil once hostilities subside.
Thakur concluded by emphasising that while the market may exhibit some short-term sluggishness, the likelihood of a major downturn remains low. He pointed out that the Indian real estate sector has become more regulated and resilient since previous conflicts, withstanding the economic pressures of the Covid-19 pandemic effectively.
Anarock, recognised as one of the leading real estate consultancies in the country, reported a 36 per cent revenue increase to INR 566 crore during the 2023-24 fiscal year.
The consultancy firm emphasised that mid-income housing is poised to recover first, and domestic leisure travel could see a resurgence once tensions ease. Despite the potential challenges, Anarock remains optimistic about the sector's ability to rebound swiftly, given its strengthened regulatory framework and the proven adaptability of developers and investors.
Source - PTI
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