The second wave of the pandemic has left Pune’s burgeoning real estate market gasping for breath.
A severe paucity of construction workers, rising prices of essential materials and delays in getting building permits have affected the construction sector.
A nationwide survey conducted between May 24 and June 3 by the Confederation of Real Estate Developers’ Associations of India (CREDAI) — apex body of private real estate developers — found that more than 90% developers are facing labour shortages at their sites and as a result, feared long delays in their projects. Nearly 5,000 developers from more than 200 cities participated in it.
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“As per the CREDAI-National’s countrywide survey, about 94% builders in Pune are facing labour shortages and say ongoing projects may be delayed. Rising prices of cement, steel, copper, aluminium and PYC will push up housing prices. Up to 91% developers say they are not getting required approvals on time,” said Anil Pharande, president, CREDAI-Pune Metro.
The survey also found that 75% of builders’ customers are facing home loan problems, given the impact of the pandemic on the purchasing power and loan repayment. More than 50% of the developers said their construction costs had increased by 10-20 % on account of rising material and labour costs.
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Given that the second wave was more lethal than the first, and the effects are now beginning to show on the economy, Mr. Pharande said the construction business, which was in full gear, now needed the government’s help to rejuvenate itself.
“Accordingly, we want the stamp duty reduction scheme to restart in Maharashtra and Input Tax Credit in the GST. Faster clearance of sanctions will also help us optimise our cost and timelines. If the projects are approved as soon as possible, we can have some control over the timing and alternative cost of completing the projects,” he said.
Need for financial stimulus
The Pune chapter of CREDAI has urged the Central and the State governments to infuse urgent financial stimulus and initiate progressive measures to assist recovery, a one-time restructuring of loans and a six months’ extension of completion date by RERA among other things.
“On the one hand, the prices of steel and cement required for construction are steadily rising, while on the other hand, the number of consumers is declining. In such a situation, the Central government should intervene and control prices of steel and cement,” said Satish Magar, National Chairman, CREDAI.