Opening Remarks by Former Deputy Prime Minister and Chairperson of Girija Prasad Koirala Foundation Hon. Sujata Koirala in the International Virtual conference of Wall Street News Agency on topic “Real Estate Survival in the new world of post covid19
It’s my great moment of pleasure to participate in the program entitled ‘Real Estate’s survival in the New World of Post Covid-19’.
I would like to extend my cordial thanks to Mr. Yuxiang Min, the president of Wall Street News Agency for inviting me as a keynote speaker and my sincere greetings to all the participants.
We live in volatile times. COVID-19 is a humanitarian challenge and it is a global health emergency. Because worst victim has been the human capital, its health, skills and knowledge, covid19 has shattered economic, social, political and even cultural life across the world. Things are happening too fast including in global geopolitics that is resetting relations between nations.
While the whole world is grappling together to win the race against the dangerous virus it is apparent that the pandemic is creating serious economic havoc across the world. It looks certain to several onlookers like me that its impact will not go so early, and this economic tragedy may serve as a stark reminder for many years to come.
Let me make it clear in the beginning that I have no idea about the survival of real estate industry in the post covid19. However, I would like to share my stray thoughts here.
Covid-19 brought a sudden and significant impact on people’s life, defying many predictions in many sectors. As we are in the midst of the coronavirus pandemic, it has not only brought severe humanitarian crises but also carried economic emergency with it. Most countries in the world, including the developed countries, are still limping to contain the virus.
Covid19 will have lasting effects on how people live, work, and play. The people all over the world now spend only on essentials and the most important things only like food, medicine, and home supplies and getting these delivered much more often at their own places where they live.
Covid19 is also having a significant impact on the future of real estate. It has caused disruptions in the industry, which I sense will impact badly for at least a decade from now. I don’t know how this industry can survive as used to be before the outbreak of corona crisis.
Covid19 has created uncertainty in the real estate industry. Beyond the immediate challenge, the longer this crisis persists, the more likely we are to see transformative and lasting changes in behavior and lifestyles. The people all over the world now spend only on essentials and the most important things only like food, medicine, and home supplies and getting these delivered where they live.
Although I am not an expert on real estate but I can say this that real estate leaders must take action now to lay the groundwork to deal with what may be permanent changes for the industry in Post Covid-19. Areas that have greater human density seem to have been the hardest hit during Covid-19.
In the changing context that we are in at the moment, it is time to think about villages that have been abandoned for long and look deserted in countries like Nepal, where six million youth go abroad in search of opportunities. Taking urban amenities to rural areas will help revive these abandoned villages. This will put real estate in villages in high demand and can survive easily protecting our health and economy if we can take urban facilities in the countryside.
Remittances that constitute a quarter of Nepal’s GDP also went to this sector as investing in real estate in urban areas was considered secure and good for catching up opportunities for their children. Until the outbreak of this virus, investing in in real estate was the first advice given to anyone for secure and lucrative modes of investment, from an investment in land and building. This area was considered safe over a period of time in Nepal. It is believed that people tend to make investments in lands and buildings after they have substantial savings.
According to the World Bank report, remittance to Nepal is expected to drop by about 14 % this year, signaling economic distress. This situation ultimately impacts the real estate sector by minimizing investment because people primarily focus is on their basic subsistence than to buy long term investments thereby reducing the demand for real estate and pushing price down.
It is well known that real estate sector covers the huge amount of capital investment and seems that it may takes few more year to return the new normal . I think investor should diversify their investment in different industrial and production based sector so that they can increase the incomes even in pandemic and can generate large opportunities of employments to the youths. . Therefore if the freezed real estate investment is mobilized to the fast-growing sectors such as online education, software industry, virtual consultation, vocational training, scientific agriculture system, home delivery industry, may have good future prospects for investors, consumers and employees.
At last, I would like to conclude my short remarks and thank you so much Mr. Min and all the participants. I look forward to hearing from you all. I wish the program all success.