No one could have imagined what 2020 had in store for the world when the New Year dawned half a year ago. But the impact of the pandemic has been devastating, far more fatal than anyone could have ever imagined. When it comes to fatalities, these are not confined to human lives but businesses as well. None of the business domains has been able to steer clear of COVID’s impact, and some industries have suffered more than the others. Retail stores have closed, restaurants and pubs are in shambles, and recovery seems to be a long road for the travel and tourism industry. The real estate segment too, has borne the brunt of the situation to a significant impact.
The implications go much beyond the halted projects due to the sudden lockdowns or the massive recession in the industry as a whole. There is much for businesses to worry about whether they are construction companies or real estate agencies. Fortunately, there is a mix of good and bad rather than everything going against the industry. Let us explain the overall impact of COVID 19 on the real estate segment and how things are likely to pan out in the future.
Labour shortages are rampant
Perhaps the biggest concern for the construction segment of the industry is labour shortage as the manpower was forced to migrate to their home towns during the lockdowns. When projects halted during the first phase of the outbreak, the workforce had no way to sustain in the cities and decided to move back. But now that the restrictions are lifted, and projects are on, the problem of labour shortage is at large.
People are adamant about moving back and joining work again. Real estate agents and construction project managers are concerned about not having enough people to work on sites. The situation doesn’t appear near resolution unless firms decide to embrace innovative approaches such as automation and modular building.
Construction safety is the priority
Another way the pandemic has influenced the industry is by making construction safety a top priority for businesses and stakeholders. Project managers are going the extra mile to enforce the safety and social distancing norms at project sites that are now open for work. This is being done by scheduling multiple shifts with fewer workers. Further, managers are moving to remote collaboration through smart project management platforms that are keeping the teams on the same page without being physically together.
Hand hygiene, equipment sanitisation and use of personal protection equipment (PPEs) are some other measures being taken to ensure safety and wellness for the workers. Apart from construction safety on site, there is also an emphasis on safety norms for real estate agents and people working on the back end. Certainly, this is something that customers and employees expect businesses to do.
The supply chain is going haywire
Now that enough has been said about labour shortages and wellness endeavours; it becomes imperative to discuss the impact on other aspects of businesses as well. The virus has caused massive disruptions in the supply chain, which is having dire consequences on projects. There is a shortage of supplies in the industry, while some of the major requirements are on a complete halt too, supply chain disruptions are capable of delaying projects.
Project managers are trying their best to find a way around, with alternate suppliers and proper allocation of resources. Still, the picture seems to be bleak unless supply chains resume soon.
Dwindling demand is a cause of concern
While construction companies and project managers are struggling to maintain their footing, real estate agents have their share of challenges to deal with. Since finances are tight in the market, there is an overall fall in demand for property. Moreover, there are looming apprehensions about economic uncertainties that make people less inclined towards buying.
The rampant job losses and pay cuts are some other reasons why the demand is constantly declining, and real estate businesses are finding it tough to stay afloat. Even those who are interested in buying are fearful about interacting physically and visiting properties to nail the deals. This is causing a widespread slump in the market, and things are likely to be the same for the foreseeable future.
Digitisation is the key to survival
Although the picture seems bleak for the vertical, the crisis brings a new opportunity as well. Whether it is the construction segment or the property market, the only way businesses can survive now is by moving towards digitisation. For example, construction firms are fast embracing cloud-based project management platforms to automate various aspects of projects. From communication to collaboration, scheduling, reporting, budgeting and cost control, these software solutions are capable of handling the A to Z of project management.
The use of robotics-driven vehicles and automation on project sites can cut down crowds and make them reduce the dependency on labour as well. Similarly, virtual reality-based property apps are fast becoming a part of real estate agencies. Agents can take the prospective buyers and renters on virtual tours of the properties without having to visit them in person.
The industry has come across massive changes already, and much seems to be lying ahead. Even as things gradually get back to normal, businesses are not going to be the same. The pandemic is the biggest crisis the generation has faced, and getting back on track is going to take a lot of work. However, embracing the right technology solutions can go a long way in making your business pandemic-resilient. So go ahead and realign your business for the new normal with a fresh perspective.
The pandemic has changed the face of businesses across all industry verticals, and real estate is no exception. The impact spans both construction vertical and property markets. While there are several challenges that it has opened up for businesses, the crisis also spells a new opportunity in the form of tech adoption.