As the pandemic continues to sear through businesses, its impact on real estate and the construction industry is anticipated to evolve over the coming months. Even as the realty sector battles through difficulties with material supply chain disruption, labour shortages and the citywide shutdown of construction sites, experts and developers put on a brave face.
Mohit Goel, CEO, Omaxe Limited, said developers are facing uncertain times ahead. “Macroeconomic uncertainties, shift in the buying behaviour of consumers, reverse migration of labour, disruption in supply chain of raw materials and an increase in its price, all necessitate more action from the government,” he said.
A right step
Like Rajasthan RERA, which has granted an extension of one year, Goel said other State governments need to step up to the plate and follow suit. “A one-time loan restructuring and incentives to stimulate demand to enable home buyers to return to the market is also essential,” he said, adding the government’s decision to extend the completion date of projects by six months was a step in the right direction.
In a major relief to the real estate sector recently, the Central government advised State governments to extend the timelines of RERA (Real Estate Regulatory Authority) projects by six months. All real estate projects registered under RERA expiring on or after March 25 are to get a six-month extension as the lockdown to contain the Covid-19 pandemic stalled work at sites.
Navin M Raheja, CMD, Raheja Developers, said the extension of six months for completing projects was warranted, “particularly for NCR-based developers, considering that construction activities had also stalled in the Delhi NCR region during October and November last year due to severe air pollution.”
Yash Miglani, MD, Migsun Group, said the disruption in supply chain and issue of labour shortage in the real estate sector cannot be ignored for long. “Decision-making bodies need to urgently chart out a plan for developers to overcome these challenges,” he said.
Vijay Verma, CEO, Sunworld Group, said the government’s deadline extension would help realtors and developers maintain positive relations with homebuyers. “Government also needs to look into labour shortage and scarcity of raw materials. We are awaiting guidelines that have focus on crucial aspects like social distancing and smooth execution of construction activities,” he added.
Putting on a brave face, Amit Modi, Director ABA Corp and President (Elect), Credai Western UP, was of the opinion that investors who have burnt their pockets in equity would now look to pick up real estate assets. “These investors are not particularly interested in the configuration but concerned more about the long-term asset and the returns it would fetch. It is just a matter of few months,” he said.
Naredco webinar
At a recent webinar with Naredco (National Real Estate Development Council), Housing Minister of Maharashtra Jitendra Awhad dwelt on the many issues ailing the real estate sector.
Niranjan Hiranandani, National President, Naredco, and Co-Founder and Managing Director of the Hiranandani Group, said there was a dire need to instil ease of doing business and that it was necessary to have it percolate down to the lower levels of bureaucracy. “Time-bound issuing of permission and clearances are imperative for the growth of the real estate sector,” he said.
Stressing on the last mile funding challenges that are holding up many realty projects, Hiranandani said the industry has been seeking State government intervention to help alleviate the challenging situation on the ground.
Measures to regain traction
Among the many measures enumerated to help the realty industry regain traction were ease of doing business; digitisation of approvals; rationalisation of ready reckoner rates; suspension of Section 18 read with 19 (4) RERA Act for two years; no stamp duty and GST for stipulated time frame, among others.
Minister Jitendra Awhad assured the forum that quick approvals would be granted within 24 hours and no files would be kept pending for long. He added approvals related to MHADA, Slum Rehabilitation Authority and the Repair Board would be sanctioned within 60 days.
Commenting on redevelopment, Awhad said, “While purchasing lands is not feasible in the current scenario, we must look at the redevelopment of slums or buildings as an opportunity.”
He added, “We are also working with the government to reduce premiums for two years. Long standing demands to introduce uniform laws are in consideration.”