The real estate sector, which is reeling under the impact of COVID-19, has called the pandemic a ‘Force Majeure’ and the extension of timelines for completion of projects under RERA crucial announcements by Union Finance Minister Nirmala Sitharaman.
But representatives of the Confederation of Real Estate Developers Association of India (CREDAI) and Telangana Real Estate Developers Association (TREDA) have said that they were eagerly awaiting measures for infusion of liquidity, de-cartelisation of cement prices, and restoration of supply chain to ease construction activity.
According to CREDAI national spokesperson, these measures were needed to increase the demand, by giving more sops to home-buyers by increasing the tax deduction limits for interest on home loans and facilitate the sector to regain momentum.
In Telangana, though most developers resumed work on projects after the Ministry of Home Affairs eased the lockdown guidelines, the subsequent decision to allow migrants to go back home has seen up to 20 to 30% of construction workers going back.
TREDA vice-president Vijay Sai said that the extension of timelines to six months may not be sufficient because of issues, including manpower. Cement prices that went up by 60% post COVID was another impediment. The steep cost of cement would drastically increase the construction cost. It will take at least three to four months for the industry to settle down even if the migrant workers return, he said.
“The interest rate on home loans and GST must be reduced and a one-year moratorium be given on loans, and interest concession on existing loans, to improve cash flow,” he said.
Before COVID, a cement bag was ₹220 and it is ₹380, now, said a developer. The cumulative impact of all factors will delay projects at least by one year. Also, middle-level builders will face hardships to complete their projects.
