Three months after demonetisation was announced, small-time builders and those renting out buildings — flats, houses and shops — in Kozhikode are yet to recover from its fallout.
Delayed payment of monthly rent by lessees, deferred payment and payment in instalments are some of the problems they face.
“In many cases, rent has not been paid for the past two months,” said P.K. Faisal, district general secretary of the Kerala Building Owners’ Welfare Association. “Most building owners are not familiar with online payments. There is shortage of cash too.”
A member of the association said many shopkeepers on S.M. Street had delayed their rent payment under the guise of demonetisation.
With the real estate sector still unable to sail through the crisis spurred by cash crunch, construction activities too have been hit.
Sheikh Shafarudheen, a small-time builder based in Kozhikode, said new projects were not being taken up. According to him, only those projects that began before November 8 are in different stages of completion. “Land deals have come down significantly and no new registrations are happening,” he said.
“People are not buying new flats or houses because either they don’t have enough purchasing capacity or they don’t want to put their transactions on record,” said Mr. Shafarudheen.
“Post-demonetisation, we did not have enough labourers and there was shortage of building material. The labourers have returned now and material is available. But there is no cash and we cannot take up new projects,” he said.
Migrant labourers
Migrant labourers, who form a major chunk of the work force in the real estate sector in Kerala, had returned to their home States soon after the announcement of demonetisation. Though most of them have returned, they are unable to find work.
In rural areas, however, there is still shortage of labourers. Mohammedali Kallada, secretary of the association, said in places like Feroke it was difficult to find workers. “Most of the employees in small shops in rural areas are from other States. Their business has been affected because those who have gone home have not returned, affecting their ability to pay rent,” he said.
Another issue that is stopping people from going for new land deals is the anomaly in land prices. C.T. Kunhoi, a small farmer and businessman, said mostly there was a huge difference between the price approved by the government and the market price.
Earlier, it was easy to show the official price of land on the stamp paper and demand the market price from the buyer. “Now, as everything is being tracked, you will have to show the source of money and people are hesitant to buy or sell property,” he added.
