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Realty Woes: Over 15 lakh units face delay amid lockdown
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SME Times News Bureau | 26 Mar, 2020
As India goes into a nation-wide lockdown till April 14, completion of
over 15 lakh under-construction housing units are likely to face delay.
According
to data by Anarock Property Consultants, more than 15.62 lakh units,
launched between 2013 and 2019 are under construction in the top seven
cities, out of which projects in Mumbai Metropolitan Region (MMR) and
National Capital Region (NCR).
A report by Anarock said that a
lot is currently at stake for Indian residential real estate as cities
go into complete lockdown mode to battle the spread of COVID-19.
Developers tend to schedule project launches during the auspicious
festivals of Gudi Padwa, Akshaya Tritiya, Navratri and Ugadi. The strict
advisories for complete lockdown will impact housing sales during the
upcoming festivals, usually considered auspicious by several homebuyers
to buy homes, as per the report. Prashant Thakur, Director &
Head, Research, Anarock Property Consultants says, "Another fallout of
the lockdown is that many key markets will have almost zero construction
activity at the project sites. This will further strain several
developers' financial health."
"As many as 15.62 lakh units
across the top 7 cities were in various stages of construction as on
2019 end, reveals Anarock research. These include all under-construction
units launched between 2013 till 2019-end. Even this figure is
conservative - the number of units will be higher once Q1 2020 data
comes in," Thakur said.
According to Dhruv Agarwala, Group CEO,
PropTiger.com although the lockdown is necessary to control the
coronavirus outbreak, it would have an adverse economic impact.
"While
necessary, the virtual lock-down in major cities across India, due to
the recent corona virus outbreak, will certainly have an adverse impact
on economic activity across sectors including real estate. We too have
begun to see a dip in traffic on all our platforms," he said.
Niranjan
Hiranandani, National President, NAREDCO said that Indian real estate
was already facing a challenging time, the COVID-19 crisis just adds
fuel to the fire.
"It has impacted all types of work related to
real estate, be it planning or construction or sales and marketing. Even
home seekers are impacted, and the festival of Gudi Padwa/ Ugadi/ Cheti
Chand which traditionally sees good activity as regards new booking as
also taking possession, this year, might see lesser numbers." He
further said that the economic response task force is evaluating the
scenario from the Indian economy perspective, "so we expect real estate
to be on the list, given that 250-plus ancillary industries depend upon
real estate; not to forget it being the second highest employer in the
Indian economy.
"I am sure the task force will evaluate the situation and take necessary action, at the right time," Hiranandani said.
In a letter to the Finance Minister, industry body CREDAI had sought
measures from the government to prevent the sector from collapsing on
account of COVID-19 impact.
It said that all interest and
principal repayments falling due over the next three months in case of
real estate projects should be put off and recovered over the next nine
months and south waiver of penal interest charged by banks and financial
institutions for a period of one year or until such time as it takes
for the pandemic to abate. Since the spread of the virus in India, developers have also taken precautionary measures.
Ravish
Kapoor, Director, Elan Group said, "We are taking all necessary
precautions to tackle the COVID-19 threat. We are encouraging employees
as well as workers to wash their hands at regular intervals and adhere
to the standard hygiene practices. Residents with even a mild cough and
cold are being encouraged to consult a doctor immediately."
Rahul Singla, Director, Mapsko Group said that similar precautionary measures have been adopted in his company and apartments.
"Employees
and residents are also encouraged to wash their hands at regular
intervals and take special care of sanitation. Also, we have installed
hand sanitizers at various places on the campus as well as chemical
spraying is being done to prevent infection," he said.
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