Real Estate Sector: Will labour reforms & unlocking the economy bring positive tides? Experts answer

Some industry leaders believe though the work from home trend might slowly go away as the restrictions due to Covid-19 ease, but it will give way to work from anywhere which will augur well for the real estate market in well-connected cities, especially metros.

According to the ManpowerGroup Employment Outlook Survey, corporate India is showing “healthy signs of recovery” and plans to hire more people in the first three months of 2021 compared to the quarter ending December. The sectors expected to drive the job market in the 2021 first quarter include finance, insurance, real estate and mining & construction. All other sectors indicate negative growth in this quarter, the survey said.

According to Rohit Hasteer, Group CHRO, Housing.com, Makaan.com and PropTiger.com, the major reason for the above-mentioned trend is the push towards affordable housing segment by the government via schemes like Pradhan Mantri Awas Yojana (PMAY) which has infused the sector with refreshed investor sentiment and there are several new projects in the pipeline.

“A slew of measures like GST concession, reduction in stamp duty, low-interest rates and Rs 25,000-crore stress fund for stuck projects have given a much-needed impetus to the sector and will help break the industry’s slowdown chain,” he said.

Similarly, Vikas Chaturvedi, CEO, Xanadu Realty, said the second half of 2020 saw an uptick in demand for homes, with the pandemic making buyers realise the importance of owning a home.

Besides, he said, “Government incentives like loan moratorium, reduction in home loan rates and stamp duty etc boosted the demand. These factors combined have led to the growing hiring sentiment in the industry.”

Since a lot of businesses have already started and are gradually taking shape, Nishant Deshmukh, Managing Director, Sugee Group, points out that job posting portals are also flooded with the openings.

“Gradually, if not in full-swing right away, we are reaching the pre-Covid level in terms of recruitment,” he said.

As 2020 has seen an acute slump in terms of growth, development, sales and rentals of all real estate asset classes as a result of a generous period of inactivity, industry experts foresee businesses will come back with great vigour enabling the sector to become resilient.

Speaking on the same, Ankit Aditya Pradhan, Founder & CEO, Realty Assistant, said, “Within a span of 2-3 quarters the business will be able to fall back to the pre-Covid condition.”

However, he also believes a major challenge will be faced in terms of people being comfortably cocooned in their shell due to the lockdown and WFH.

“People are still sceptical of coming out of their comfort zones, their homes and most importantly their safety circles. But the vaccine making headlines in the news should relieve people and encourage them to evade their fears and come out to contribute to the revival of the business,” he added.

Highlighting the other challenge, Deshmukh said there is an increase in demand for the skill set of VUCA along with an approach to deal with the changing scenarios. “We are looking at educating and training our team for the same,” he said.

In a fateful turn of events, industry leaders assert that the recent reform in labour laws is expected to give a fillip to the growth of the sector. They think that the proposed labour reforms are likely to have a positive impact on the industry at large and they seem to offer something to both the employer and employees.

“The labour reforms will create more trust and people would be willing to join the largely unorganised construction sector. Overall, these reforms offer industries more flexibility in conducting businesses, make industrial strikes difficult while promoting fixed-term employment and expanding the social security net for informal workers,” Hasteer from Housing.com said.

Deshmukh from Sugee Group said the reforms certainly will bring simplicity and ease of operations as the uniformity of wages will help to get the right skill at home land itself for business.

However, he said, “The flip side for this would be the shortage of workers from different states if the need arises. The construction industry largely depends on migrant workers. Also, the uniformity of wage should be addressed properly depending on the geographical location and economics.”

“With the current scenario where all industries are recovering from the slowdown, especially real estate which is labour intensive, such reforms should also be industry supportive in regards to structuring wages,” added Deshmukh.