Realtors fear sales will fall in June quarter due to coronavirus curbs

Construction work to continue in Maharashtra; several builders make arrangements for workers to stay at site

Real estate players in Maharashtra will continue construction activities across the state but are expecting sales to slow down considerably in the June quarter due to the ongoing lockdown.

The construction sector is exempt from the lockdown and most builders have made arrangements for their workers to stay at the sites. The potential loss of GVA (gross value added) for Maharashtra in the construction sector alone due to this lockdown is estimated at Rs 2,584 crore by rating firm CARE. The agency warned that while construction activity will continue with SOPs in place, the pace is expected to slow down to an extent and new projects would not be taken up because of the uncertainty.

Sales in the Indian real estate sector had slowed considerably due to the lockdown in Mumbai and other Maharashtra cities. But with the state government giving a steep discount in stamp duty, several deals took place in the state. But builders say the new financial year has started on a sombre note with enquiries dropping in the first 15 days of April.  

Real estate experts said while the lockdown is essential to break the chain, it is likely to impact real estate business both on demand and supply. "Closure of businesses as a part of government measures will dent consumer sentiment in the near term, affecting the pace of home buying in residential and office space leasing in the commercial. While construction activities are permitted, the development of residential and commercial buildings will be impacted owing to the timely availability of raw materials and the resurfacing of the concerns around reverse migration of labour. At the same time, the rapid progress in the rollout of vaccines paired with the ongoing restrictions provides us elbow room to believe that this is a short-term blip and the market will be back on track sooner than later," said Samantak Das, Chief Economist and Head Research & REIS, JLL.

A survey of builders in the Mumbai region has revealed that only 2,100 of 36,000 construction workers left Mumbai in the last few weeks, mainly to attend the festival of Holi and marriage season – a trend seen during earlier previous years.  

Real estate developers said they are already taking steps to keep their workers safe by testing workers for Covid at the sites to isolate Covid patients as early as possible. “’With workers belonging to the lowest pay grade and critical to our day-to-day activities, it is extremely important to safeguard their best interests. Hence, we urge the State Government to allow construction activities at sites given the likelihood of an impending lockdown and also ensure that the supply chain of construction materials is kept intact. As developers, we are more than prepared to help the government in tackling this second wave by enhancing requisite measures to ensure a safe working environment at sites,” Deepak Guleria, President of Credai-MCHI, an umbrella body of Mumbai real estate developers, said.

Niranjan Hiranandani, MD of Hiranandani Communities and National President – NAREDCO said the the industry is now much equipped to tackle the on-ground situation during the Covid resurgence with better safety gears and precautionary measures in practice for in-situ-migrants' labourers. "Complying with the state governments SOPs, developers are also being responsible to facilitate food, shelter, and daily wages acting as a safety net to keep the reverse migration at bay. There is a dire need to expedite the vaccination drive following regular Covid tests to mitigate the risk," he said.

"In situations like mini lockdowns, business continuity is coping with alternatives technology and digital platforms to keep the sales momentum unhampered and industry sees no cause of worry as the production is ongoing with uninterrupted supply of raw materials in the best possible environment. Hence, we may witness short term sluggishness for site visits due to travel restrictions, but under the mission unlock the sector will rebounce with more ready products to cater the discerning home buyers,” said he.