COVID-19 crisis may hit property prices, but only in some segments, say experts to CNBC-TV18

What is worthy of note, however, is that various markets have reacted differently to the crisis. Puri said that cities like Bengaluru have done well in recovery and sustained real estate appetite, as transactions have continued in the post-lockdown phase.

“On the other hand, Noida has been shattered,” he added, “Buyer confidence is largely dependent on whether there are construction work and activity at the site. Buyers say only then they will come in, book, and pay for what they have booked.”

Taking exception to the analysts’ view that premium or luxury housing may see a 10 to 12 percent discount on the price tag, K Raheja Corp director, Vinod Rohira said developers will continue holding to inventory since luxury housing isn’t a volume-driven business anyway.

“Currently, only end-users who are really desperate and want a deal will come to the table and he will get a deal because any developer will give him a deal. But it (luxury real estate) is not a volume market, and it is going to catch up when blue skies return, people start seeing the value in their equity, and come to buy a home,” said Rohira, “In the next three or four months, you’re not going to see any demand so there is no point slashing prices and saying ‘come take a discount’. This is not a product that’s going to sell at a discount.”

Puri agrees. “What you will see in Mumbai in the premium luxury space is that developers like the Rahejas and Oberois who are not leveraged and are quite comfortable, will hold on to prices, and won’t get out to sell at this point in time,” he said.

If there’s any pricing pressure on real estate, a large chunk of that will be felt in the re-sale market, according to Puri. The Anarock boss said that a large percentage of developers or sellers may engage in panic selling, owing to poorly performing non-realty businesses, and the need for cash flows.

“Today’s price of their apartments is lower than the price they bought their apartments five or six years ago. So, that is where you are going to see stress — in the re-sale segment,” said Puri, “You need to peel the onion and explore project by project and developer by developer, and you’ll see that in the re-sale space there is stress since non-real estate businesses may have suffered and these developers may want to start selling apartments at a discount.”

While the word doing the round is that commercial deals may fall upon cloudy days especially with the COVID-19 Pandemic taking a toll on office work culture, the industry is quick to put those notions to rest, at least for the time being.

“Markets are still landlord-favourable owing to very low vacancy rates. There’s not much supply coming in over the next two years and it is expected to become tenant-favorable but it’s going to take some time to get there,” said Nair, ruling out any immediate correction in present-day office rentals.

Rohira agrees. “Nearly 80 to 90 percent of commercial real estate comprises tech companies. Across India, in five to six key markets, 80 to 90 of these rents are sub-dollar,” he said, “Tenants are mature players in the IT industry and they understand partnerships with Grade-A developers. I don’t see these rents going anywhere in the office space."

While conceding that demand for two quarters will be “majorly subdued”, Rhoira said that demand will come back since India’s tag as a destination for IT firms isn’t going anywhere, despite work from home catching up as part of everyday work culture.

“If you’re looking at CBD real estate, supply is just not there,” he added, “In two months, we have done three transactions in BKC, during COVID-19. We are negotiating with two more clients about some more supply we have in BKC.”