Pandemic, lockdown likely to hit sales of residential units by 25-30%: Report

The Covid-19 pandemic that has forced the country into lockdown is likely to adversely affect the residential real estate sector, which has already been grappling

The Covid-19 pandemic that has forced the country into lockdown is likely to adversely affect the residential real estate sector, which has already been grappling with reduced demand for the last few years, according to a report.

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The report, released by a private real estate consultant, Anarock, on Wednesday, predicts a 25-30% decline in the sale of housing units this year, compared to 2019. With a large number of construction workers returning their hometowns, projects across the country could be delayed by a further eight to nine months.

City-based realtors and consultants echoed the views, saying that all efforts by developers to stay afloat by reducing supply, completing projects and launching affordable projects will be for nought due to the Covid-19 pandemic.

As per the report, 2.61 lakh residential units were sold in top seven cities in 2019 and the number could fall to 1.70 lakh and 1.96 lakh units. The pandemic could also lead to a decline in new launches, from 2.37 lakh units in 2019, to anywhere between 1.66 lakh -1.78 lakh units, according to the report.

The top seven real estate markets in the country from which data has been collected are Mumbai Metropolitan Region (MMR), Delhi-NCR, Chennai, Pune, Hyderabad, Bengaluru and Kolkata.

Anuj Puri, chairman, Anarock property consultants, says, “Besides demand-supply decline in 2020, significant new trends will emerge across segments of Indian real estate. New business models will be tried, making players more reliant on technology for ensuring business continuity.”

Developers said that due lockdown, there are no site visits, discussions, documentation or closures, which indicate a difficult next few quarters.

In a earlier report released on March 25, Anarock had stated that about 15.62 lakh units that are under construction in top seven realty markets across the country will be delayed. MMR accounts for nearly 4.65 lakh such units while NCR, which includes Gurugram, Faridabad, Noida, Greater Noida and Ghaziabad, has over 4.25 lakh units in various stages of construction, which are likely to be delayed. All these units were launched between 2013 and 2019.

To offset the problems, developers want the government to announce relief measures — relaxation in payment of licence fees, taxes and other levies — for the realty sector. Haryana Real Estate Regulatory Authority (HRERA) should also take the delays into account and provide relaxation on late penalties, they said.

Pradeep Aggarwal, founder and chairman, Signature Global, a city-based realty company, said that to help businesses, there is need for suspending debt servicing, reducing interest rates across businesses and re-scheduling loan payments, among other things.