A day after the Punjab and Haryana high court told the state government not to allow construction activities unless builders give a written undertaking not to draw groundwater, realtors said on Tuesday that the real estate sector would be hit in a big way and projects would be delayed.
"The decision would definitely impact the sector in the worst form. Consumers will also suffer because of cost escalation as projects will be delayed," said Lalit Jain, president of CREDAI, the apex body for realtors.
The association will urge the state to find a solution to the problem as it is their duty to provide basic infrastructure, including water, CREDAI (NCR) acting president Geetamber Anand said.
Global property consultant Jones Lang LaSalle CEO Santosh Kumar said, "Water is key for construction activities. The order would lead to delay in construction, which will ultimately impact the cost of a project. In the longer run, property prices may also go up in Gurgaon."
Commenting on the order industry body Assocham said, "It will not only give a severe jolt to the realty sector but will also hurt the investment scenario in the state."
The industry chamber also asked the state government to ensure availability of basic infrastructure like water in Gurgaon, which houses many multinational companies and is a major property market in the NCR region and the country.
Citing findings of their study that showed as much as 50% of investments in Haryana as of December 2011 were in the realty sector, Assocham secretary general DS Rawat said, "This investment was largely driven by a construction boom in Gurgaon, which is a hub of corporate India - both domestic and global."
With a halt in the construction sector, the investment in the state will be drastically reduced," he added.