With the onset of worldwide pandemic COVID-19, the world has stood still forcing much of the Companies to make their employees to work remotely from their homes to maintain social distance approach preventing spread of virus. This has given the businesses a chance and a good amount of time to explore ways of managing work and workforce without direct supervision of the seniors.
COVID-19 and Real Estate Industry: Impact and Causes
In India, companies like, Tata Consultancy Services, HCL Technologies and many other IT giants have expressed their intention of promoting and implementing work from home policy for their employees even after the COVID-19 pandemic comes to an end. With such increasing inclination towards working from home policies already adopted and further proposed to be adopted by many other companies, what future holds for the real Estate Industry and software industry in India?
Real Estate accounts for nearly 7 percent of India’s Gross Domestic Product but with a decreased number of employees required to be available in office and decreased liquidity in the hands of businesses due to limited operations, the demand for new spaces for expansion of offices is expected to fall considerably, both in terms of investment in new properties and renting of spaces. This will also reduce the burden of high costs incurred by the companies in terms of electricity charges, parking space rents and other facilities provided in offices.
Moreover, people would also restrain themselves from using co-working spaces to avoid contact with people for some time, thereby further impacting the demand of property by the tremendously growing concept of co-working spaces to fall.
The declining curve of real estate demand would not only impact the economy directly through expected fall in prices of commercial properties, but it has trickle down impact as well. How? Real Estate Industry is the second largest sector providing employment in India after Agriculture and lower construction activities would force the industry to cut operational costs thereby leading to low generation of labor demand in the market rendering more of labor workforce jobless. This will then reduce the liquidity in the hands of labor further impacting the GDP contribution by the workers.
COVID-19 and Software Industry
Software Industry, on the other hand, is booming with a terrific demand that has been generated due to work from home policy and need for maintaining cloud database for similar future events. Even the small businesses are looking for options to get their work on cloud for incessant operations. This has increased demand for technical people in the market do develop applications and software to meet unexpected demand for such platforms. Though gradually, but small businesses will also move towards a cloud based working system and probably the problem of data breach, which prevents businesses maintaining online data at high risk, will also be dealt with in a more efficient manner.
So, the coming time will unfold what work from home opportunity has in fate for not just Real Estate and Software industries but for various other sectors and industries considering their inter dependability on each other.
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