Coronavirus | Construction stalled, homebuyers brace for further delay

Bengaluru has 2.02 lakh units under construction. file photo

Bengaluru has 2.02 lakh units under construction. file photo  

Real estate sector stares at cost overrun

Thousands of homebuyers, who have been fighting a battle to get possession of houses, are bracing for further delay with the COVID-19 lockdown bringing construction to a standstill.

According to private property consultants, lakhs of units are under construction in major cities, and a delay in delivery is inevitable.

Of over 15.62 lakh units launched between 2013 and 2019 in the top seven cities, Pune has nearly 2.62 lakh units under construction, followed by Bengaluru with 2.02 lakh units and Kolkata with approximately 90,670 units, as per estimates of Anarock Property Consultants. Mumbai Metropolitan Region and the National Capital Region account for 57% of the total units.

Among the three southern cities, Bengaluru has the maximum under construction stock as on 2019-end with nearly 2.02 lakh units compared to Hyderabad and Chennai, they added.

With the lockdown coming into effect in the midst of major festivals such as Ugadi, housing sales are also expected to be hit.

CREDAI chairman Suresh Hari said the present situation was “unexpected and catastrophic”.

“All sectors have taken a beating, particularly real estate. The sector is now bound by timelines due to the introduction of RERA. We are talking to the government to reset our deadlines,” he said.

The sector's other major challenges are fund flow and labour mobilisation. “The existing labour is without work. They are either in labour camps or have gone back to their native places. The government is looking at options to help them. In addition, we are looking at the total cost overrun, particularly when the world economy has taken a big beating. People are not going to be looking at real estate as an investment option as they have to reset their own lives. The government has a lot to do once the health issue is sorted out. Hopefully then, it will be able to look at the economy,” Mr. Hari added.

M.S. Shankar from the Forum for People's Collective Efforts, Karnataka Chapter (formerly Fight for Rera) said as it is homebuyers are going through a tough situation, but this crisis will be adding fuel to the fire.

“Developers and builders are approaching the government for a force majeure, and for relief in delay compensation and project extension. Homebuyers will again suffer. We have appealed to the Centre to defer EMIs for three months to offer some relief for homebuyers,” he said.

Why you should pay for quality journalism - Click to know more

Related Topics
Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Apr 6, 2020 10:40:29 PM |

Next Story