A year on, Noida recovers from cash ban, Gurgaon lags
The real estate market in Noida is seeing more business due to price correction since demonetisation was announced by PM Narendra Modi last year; Gurgaon, meanwhile, has failed to improve due to oversupply, large inventory and delayed projectsnoida Updated: Nov 07, 2017 23:47 IST
The perceived slowdown in the real estate industry in Gurgaon, coupled with demonetisation on November 8 last year, has ensured that there is not much work for labour both in organised and unorganised markets. While Noida has witnessed a turnaround since the cash recall, with both labour and material suppliers getting work, the situation in Gurgaon has failed to improve due to oversupply, large inventory and delayed projects.
Experts said that another reason why real estate and construction sectors have failed to rise from the slump is that a large majority of apartment buyers in Gurgaon are investors whereas most of them in Noida are end users. Data released by a real estate firm revealed that around 5 lakh apartments were launched every year from 2010 to 2015 across NCR and eight other cities across the country. But in the last two years, the number of new flats has been less than one lakh a year.
“The buyers are not ready to invest in new projects and many are not able to exit from current projects due to delayed deliveries. The housing activity, too, is not happening which is causing difficulties to all stakeholders," Sanjay Sharma, a real estate consultant, said.
The decision to ban big currency notes also prompted many homebuyers to shelve any new construction plans. “Although the decision to ban high value currency notes did not impact the primary market, it brought down the market sentiment badly. The black money component may have reduced in secondary market deals, but GST and RERA (Real Estate Regulation Authority) have proved to be dampeners. Employment is down by almost 60%,” Praveen Jain, vice chairman, NAREDCO, said.
Gurgaon-based brokers who also deal in Noida said that more deals were happening as it’s an end-user market and due to price correction, lot of resale of flats are happening there.
“Demonetisation impacted primary sale in the real estate market in Noida, but only for the initial six months. Six months since demonetisation, things have been positive for the realty sector. Because of a perceived slide in market sentiment, buyers are investing less in real estate. But demonetisation had a positive impact, as the government reduced interest rates thereby benefiting realty sector. It will impact positively in the time to come because the Centre is reducing GST rates and coming up with other schemes to boost infrastructure. Demonetisation affected all businesses, including the realty sector but only in the initial months. In future, it will have a positive impact and sales would revive,” said Geetambar Anand, CMD, ATS Builders and president of the Confederation of real estate developers association of India (Credai).
As compared to Gurgaon, the buzz seems to be back in Noida, as a large number of labourers have returned to the city and according to them, the demand has risen even more than pre-demonetisation days. When the market sentiment was low, the labourers either went to their farming lands or chose other professions to survive. But now, it seems, they are back to work. “We passed those days by cooperating with each other and today people again approach us. We also knew that our pay masters had a minimum amount, which was barely enough to help them get by. However, gone are those days now and a new day has dawned,” Pradeep Biswas, a worker who hails from Hastinapur in Meerut, said.
According to DK Roy, deputy labour commissioner (DLC), Gautam Budh Nagar, there was a workforce of one million in the district, with two lakh labourers in construction sector, five lakh labourers in industry sector and three lakh in IT sector, prior to demonetisation. He added that most of them are back in the district.
Roy said though the construction and industry sector saw a slowdown post demonetisation, the labour force has not decreased.
“Compared to 2016, when we had registration of 14,000 new labourers, 2017 saw 18,000 labourers registering with us. Now, we have total 1.68 registered labourers in the construction sector. None of the factory owners had approached us for de-registration of labourers,” said the district labour commissioner (DLC), Gautam Budh Nagar.
Echoing similar views, Vipin Malhan, president, Noida Entrepreneurs Association, said that the slump in the construction sector has proved to be a bane to the workforce.
“Demonetisation alone is not responsible for the migrant labourers going back to their native places, as the slump in construction sector had rendered them jobless. Today, the construction sector has seen a 90% reduction in projects. Now, the workforce is slowly coming back to Noida,” Malhan said.
In Gurgaon, however, trade union leaders allege that the problem of unemployment is so acute that the labourers are not able to get work for more than 12 to 15 days in a month. The wages have also stagnated and survival has become a big issue, Rajender Saroha, district secretary, Bhavan Nirman Kamgaar Union, the largest body of workers in Haryana, said.
As per construction workers’ unions, there were around 2 lakh construction workers in Gurgaon prior to note ban, but a majority who went back after demonetisation, did not return. Workers also alleged that several contractors and even house owners refused to pay for their work citing lack of cash after the note ban.
“The decision to ban notes, coupled with the slowdown (in the construction sector) has crushed labourers and we will observe this occasion (first anniversary of demonetisation) as a Black Day. Even work in unauthorised colonies has been coming in a trickle, as people don’t have enough cash,” Saroha said.
Workers, who wait daily at the labour chowks at sector 22, near the railway station, Basai chowk and other areas, too, echoed Saroha’s refrain, as they are not able to get work for more than 12 to 15 days in a month. They also alleged that labour rates have stagnated and even expert masons are not able to get more than ₹500 per day. They said workers are paid only ₹300 to ₹350 per day, which is quite less. “The workers are not able to make ends meet, as they are not able to get work for long. Real estate companies are also not hiring much and paying a pittance,” Om Prakash, a labourer from Faizabad who lives in Mollahera, said.