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Home / Cities / Lockdown impact: 4.25 lakh under construction flats in NCR will be delayed

Lockdown impact: 4.25 lakh under construction flats in NCR will be delayed

cities Updated: Mar 25, 2020 23:16 IST

Gurugram: Delivery of more than 15 lakh residential units across India will be delayed due to the lockdown announced by the government to contain the spread of Covid-19, says a report by a real estate consultant firm.

In the national capital region (NCR), about 4.25 lakh under construction units will be affected, said the report released by Anarock on Monday.

The report says that at least 15.62 lakh units that are under construction in top seven realty markets across the country will be delayed. While the Mumbai Metropolitan Region (MMR) accounts for nearly 4.65 lakh such units, the NCR that includes Gurugram, Faridabad, Delhi, Noida, Greater Noida and Ghaziabad, has over 4.25 lakh units in various stages of construction. All these projects were launched between 2013 and 2019, the Anarock report said.

According to realty experts, the nationwide lockdown is going to put strain on the real estate industry, especially in the NCR where it was still struggling to overcome the construction ban of almost a month imposed by the Supreme Court to curb rising levels of pollution in November last year.

Realtors based in Gurugram and other areas of NCR said that construction has been stopped again and a large number of workers have headed home, which they say is likely to delay completion of real estate projects, including those which are near completion.

Praveen Jain, vice-chairman, National Real Estate Development Council (Naredco), confirmed the prognosis and said that it would take at least three months to start work once the situation is brought under control. “In winter last year, the construction ban put us back by two months in the NCR, and another three months are likely to be lost due to the current lockdown. This will delay projects, and we would like the government to provide relaxation in payment of licence fees, taxes and other levies. The Haryana Real Estate Regulatory Authority (H-Rera) should also take into account the delays and give developers relief from delay penalties,” Jain said.

He also said that the developers would expect the government to announce a financial package in terms of soft loans, and working capital availability to steer clear of slowdown.

According to data released by Anarock, at least 35,280 units were launched in the NCR in 2019, with Gurugram topping the list at 19,350 units, followed by Greater Noida (4,090), Noida (2,950), and Faridabad (2,430 units). The sales witnessed in NCR stood at 13,420 units in Gurugram, 6,630 in Noida and 1,51,150 units in Greater Noida.

Gurugram also saw its unsold stock increase by 12% in 2019 as compared to 2018 – from 51,840 units in 2018-end to over 57,940 units in 2019-end.

Developers on their part said that the workforce which has not been able to go home and is living at project sites is being given food and other essential items. “We have a target of helping one lakh construction workers so that they are not stressed,” said Jain.

According to the Confederation of Real Estate Developers’ Associations of India (Credai), the sector contributes to at least 10% of the country’s gross domestic product and is the second largest employer in the country. In view of this, it is of utmost urgency that interest rates on all loans for real estate projects are re-fixed at the repo rate on which banks borrow from the Reserve Bank of India, said Credai. The confederation further demanded that principal repayments for real estate projects due over the next three months be put off and recovered in instalments over the ensuing 12 months.

The confederation also demanded that Covid-19 should be declared as ‘force majeure’ under Section 6 of the Rera Act as it will allow extension of registration granted to promoters. Therefore, project completion time and exemption from penal charges should be extended by a year, Credai said.

Pradeep Aggarwal, founder and chairman of Signature Global, a Gurugram-based realty company, said that industry bodies are seeking relief measures to help businesses deal with the impact of the coronavirus pandemic and have called for a suspension for debt servicing, reduction of interest rates across the businesses and rescheduling of loan payments, among other things.

Sanjay Sharma, a Gurugram-based realty consultant, said that multi-pronged steps are required to bring the realty sector back on track. “The first priority should be to maintain the status quo and not go further downhill. Once the situation is normal, massive steps will be required to bring growth to this sector,” he said.