As Assam goes into the Unlock mode, the state’s real estate sector awaits a pick-up in demand as they stare at losses to the tune of around Rs 2,000 crore.
A government-sponsored study to assess and understand the severity of the impact of the pandemic on the state’s economy had predicted that “a lack of effective demand in the housing sector would lead to crisis and completed units will remain unsold”.
The “Report on Economy of Assam”, commissioned by State Innovation and Transformation Aayog (SITA) in collaboration with Omeo Kumar Das Institute of Social Change and Development, said real estate developers procure raw materials on credit and with a fall in demand, the crisis will spill over to the input supply chains.
Taking into account the projected population of Assam in 2020 and data of Periodic Labour Force Survey of India 2017-18, construction workers constitute 9.9% of the workforce in Assam (rural 10.2 percent and urban 7.7 percent). There are presently 7.8 lakh construction workers in rural areas and 5.9 lakh in urban areas.
“Loss of livelihood for more than a month in this sector has brought in a serious crisis. In addition to construction workers, about 9,500 people are involved in allied real estate activities,” the SITA report read.
President of Assam Real Estate and Infrastructure Developers’ Association, Pranab Kumar Sharma, told TOI, “During the initial lockdown in March, a large number of migrant workers were stranded without food at the work-sites and we had provided for them. On the construction front, frequent disruptions in the form of repeated lockdowns and unlocks has spread panic among the workforce.”
He added, “Following uncertainty regarding resumption of construction work, they left for their villages. After facing a loss in earning and starvation, they had returned and resumed work. No sooner than work had slowly picked up that another shutdown was imposed in Guwahati by end of June. This came despite the Union home ministry giving its nod to construction-related work.”
Speaking about the demand of houses in the current scenario, Sharma said sales have definitely dwindled due to significant job loss or reduction in income in the private sector. Although demand is there, affordability and financial insecurity are huge concerns. “Sale of premium houses and flats have been affected the most,” he added.
When asked about any changes in buying pattern, Sharma said, “People are more inclined towards basic flats now. As for size, the demand continues to be predominant in the 2 and 3 bedroom segments.”
“We are not seeking any financial aid from the government at the moment as their revenue has also been hit. However, we have engaged with the government in matters of severe administrative constraints in obtaining various statutory approvals which is crippling the industry,” Sharma added.
