The revised guidelines regarding ongoing construction projects issued by the Centre on Wednesday has come as a huge relief to the builders as labourers stationed at these sites can now commence work on building projects. However, the new guidelines said such work cannot be carried out in areas designated as Covid-19 hotspots.
Mumbai Metropolitan Region (MMR) and Pune have both been declared as coronavirus hotspots. The maximum construction projects are also in these regions.
Anuj Puri, chairman of ANAROCK said, “The fact that Covid-19 hotspots will not be able to resume activity from April 20 is a dampener for markets such as MMR – a highly-impacted zone, which, as per ANAROCK data, currently has the highest under-construction residential stock of nearly 4.65 lakh units. This accounts for 30% of the overall 15.62 lakh under-construction stock across the top seven cities.”
He added, “As far as construction activity in non-hotspots is concerned, developers will need to focus on resuming construction on projects that are already nearing completion and have a completion deadline within 2020.”
However, developer Niranjan Hiranandani said there was no blanket ban in the entire MMR region and Pune. “There are pockets within these regions which have been declared as hotspots. Several of these hotspots have been designated and then removed from the list. So, construction can commence in places within MMR that are not hotspots,’’ he said. Hiranandani, who is national president of NAREDCO, a body representing builders, said he has 4,000 labourers stationed at his projects due to the lockdown. “There are many such project sites where construction can commence,’’ he added.
“The relaxation has come at the right time as the situation was very grim to keep construction workers at the site afloat. With this order, the economic drivers of the country will start moving again, even as we extend the lockdown. Considering the estimated loss of Rs. 26,000 crore per day to the Indian economy as a result of the lockdown, this relaxation in lifting of lockdown is a constructive step,’’ said Hiranandani.
According to Pankaj Kapoor of Liases Foras, a real estate research firm, there are 4,155 projects in the MMR with 6.39 lakh flats under construction at present. “The unsold stock is about 2.93 lakh units. Builders already under huge debts because their cash flow has stopped and they will not be able to service their loans,” he said.
Meanwhile, MCHI-CREDAI, which represents builders in the state, urged the state government to reduce stamp duty to 1% on all property transactions for the next four months and other sops for the ailing industry. President Nayan Shah said, “The entire Real Estate fraternity is currently caught up in an unprecedented scenario which the economy has never witnessed before. In the midst of an economic disruption, real estate has suffered extensively and needs critical intervention from the Maharashtra government for its survival. We also request the authorities to share a stimulus package to alleviate fears of job loss in the industry, with lakhs of workers directly or indirectly dependent of the industry.”
