The COVID-19 pandemic has hit the real estate industry pretty adversely. Majority of the construction workers are the migrant workers. Due to the difficult situations many of these migrant workers have moved towards their own shelters and there is a less possibility of their return any time soon. Therefore, the Developers are experiencing a shortage of construction workers all around the world. Not only from the construction aspect but also the developers are experiencing problems from the revenue side as well. Many of their customers have experienced economic challenges, which has slowed down the flow of funds towards the developers. This has resulted in delayed payments to material suppliers and contractors. Also, the banks are experiencing an increase in the numbers of NPAs (Non-Performing Assets). Altogether the whole real estate eco-system has been affected very negatively. In this situation, we will discuss some of the strategies which may help the developers to regain stability.
1. Virtual Tours:
Governments are enforcing shutdowns and travel restrictions regularly. The wave of the virus is still there and it is forecasted to increase in the winters. Again people are avoiding going out and construction sites are no exception. So the real estate developers are experiencing a sharp decrease in site visits and they cannot rely upon these to convert sales.
A virtual Site tour is a much better option to adopt, in order to generate the interest in buyer’s mind, without the need of leaving his/her home. This way the developer can eliminate frequent site visits for the potential customers and also can show its property to the customer’s family and peers too. Also, the developer can reach to potential customers residing at any location around the world with its offering.
This can be easily set up online and can be embedded to the website. The advantage is that there is no need to construct a demo property by spending a huge chunk of money. The new technologies like AR (Augmented Reality) and VR (Virtual Reality) are empowering the platforms even more.
2. Digitization of Documents:
Verification of documents is a very important part of any property buying. Mostly the real estate developers were used to provide the hard copies of their property documents and restricted the reach to the public. But digitizing the documents and sharing the relevant documents to the public online will not only increase the transparency but also will increase the credibility of the project. The customers will be more confident to buy the product even if they are far away.
3. Safety Management:
Safety of the workers from the virus is too important in the current situation. First of all, a positive case at the site may completely shut down the work for some days by the local authorities. Secondly, it will create a panic among the workers and decrease the effectiveness of the work.
Therefore, it is essential for real estate developers to take precautions like ensuring every worker wears a mask, encouraging workers to keep a distance from each other, washing hands etc. This will not only maintain the workers safe but also will create a sense of assurance in their minds.
4. Robust Construction Management:
This is a challenging time to manage the construction progress with limited human resources and uncertainty in the fund and material supply. Developers can focus on reducing wastes and utilizing the most from the available resources. Work allocation of the workers is also essential. With limited workers, real estate developers need to be accurately allocating tasks to avoid delay and reworks. If required, they can involve the buyer in the process and take his inputs at regular intervals to avoid reworks at the finishing stage.
5. Restructuring Procurement Strategy:
Another big challenge is to procure materials for construction. Due to travel restrictions, many manufacturers are unable to deliver the materials at the scheduled time. Also, many manufacturers have even shut down their workshops due to several reasons. So a big task for the real estate developers is to select the right companies, vendors and suppliers who have the availability of the materials and even can deliver at the scheduled time. They can be chosen based upon the location of the workshop, supplier credibility and company manufacturing capacity. Avoiding international procurement and going for local players, without much hampering the quality would definitely help.
Bonus: Strengthening Customer Relationships:
In difficult times, it is essential to show empathy with the customers. As real estate involves high investments, customers facing problems due to pandemic won’t be able to release funds at right moments. Frequent and rigid follow-ups may hamper the relationship as well. Therefore, understanding their situation and showing empathy will not only ensure that you will be in their priority list to pay dues but also will win the goodwill among the customers. This will be a good strategy to have a word of mouth marketing and referrals from your existing customers. Real estate developers can also start connecting previous customers and show care to their situation, which may generate a positive reputation and may also generate new contacts for sales.
Conclusion:
For a Real Estate Developer, the current situation is the most challenging time from multiple aspects. New and smart strategies are required to be implemented. The power of the internet and technical tools can be very helpful to manage the operations remotely. While many developers would be facing the problems, the one showing genuine care to both its workers and customers will emerge as a game-changer. Goodwill during the adverse times is a long-lasting asset for any company.
(Source: Times of India)
