Estate agents are struggling to meet completion and launch targets as necessary clearances from relevant authorities are delayed due to localized restrictions on mobility. Supply bottlenecks are also becoming increasingly evident, as is the anxiety of hard-hat labor engaged in construction.
Certainly, the supply of new housing – and new housing starts – have already begun to slow.
According to PropEquity, a real estate data analytics platform, 22,209 homes were launched in February 2021, compared to 32,346 in the same month last year.
The developers say the number could decline further in the April-June quarter.
In Maharashtra, the biggest problem for developers is obtaining environmental clearance, as the state’s expert assessment committee has not met as often as before Covid-19.
“Real estate is one of the engines of the economy. In addition to major job creation, the state and cities receive revenue from stamp duty, GST, and development royalties and premiums,” said Rohit Gera, Managing Director of Gera Developments. “It is in everyone’s interest to ensure that there is no artificial shortage of supply due to delays in project approvals, which will once again lead to house prices soaring, which will impact affordability.”
Maharashtra developers said many projects are awaiting environmental approvals.
The developers said no meetings were held in January and March. Before the confinement, at least 3-4 meetings took place each month.
“There should be regular meetings to ensure projects are approved,” said Niranjan Hiranandani, national chairman of NAREDCO.
Developers are facing similar challenges in northern India, and government departments responsible for approvals are busy battling the virus outbreak.
“The authorities are taking longer than usual to approve the start of projects. Additionally, completed projects do not receive occupancy certificates,” said RK Arora, Supertech Group President and NAREDCO-UP President.
Developers believe that once supply is affected, there will be an increase in property prices.
“The prices of building materials have increased significantly and some suppliers are not even ready to supply. If the same continues for 2-3 months, we will have no choice but to raise the price and pass the burden on to customers,” said Gaurav Gupta, Chairman of Ghaziabad CREDAI.
In December, the professional association CREDAI wrote to the Prime Minister and all the ministries concerned to highlight the soaring prices of cement and steel. He had sought state intervention to regulate commodity prices to preserve the health of the real estate industry which has been affected since early 2020 due to covid-induced disruptions.
“We have not received the supply for March and construction at the site has stopped,” said Subodh Goyal, Secretary, CREDAI Western UP and MD Civitech. “While we can stop migrant workers, we need a continuous supply of raw materials so they have a reason to stay behind.”