The housing sector is expected to be more badly hit than in 2020 due to spiralling prices of construction material, acute labour shortage and issues faced by buyers in availing themselves of home loans.
Last year, there was a quick recovery by September, but stakeholders say the revival this year could be delayed. The Confederation of Real Estate Developers’ Association of India (Credai), however, expressed confidence that recovery would begin immediately after the second wave ends.
The crisis has already played havoc, affecting construction of individual, small and medium housing projects in the Chennai Metropolitan Area. The Chennai Civil Engineers Association says that in May 2020, 56% of housing projects including independent houses and apartments up to 6 units were either non-completed or remained unsold. This May, it was 65%.
The Builders Association of India says 3,000 housing projects ranging from 8 to 16 dwelling units were hit in May 2021 against the 5,000 projects affected in May 2020.
Builders Association of India state secretary S Ramaprabhu says about 75% of masons, both from within Tamil Nadu and from outside, had left for home and are expected to return only in August.
“This year will be worse than 2020 because of escalation of construction material prices, homebuyers encountering salary cuts and facing difficulties in accessing adequate loan amount from banks,” he said. Unlike last year, quick recovery may not happen this year, though sales will start reviving from November, he added.
Chennai Civil Engineers Association president S Jagadeesan said construction had come to a near standstill at several sites. Noting that the number of projects affected during the second wave had increased, he said residents who left Chennai may take more time to return. “This will have a bearing on the sale of dwelling units,” he added.
Credai (Tamil Nadu chapter) president Suresh Krishn, however, remains bullish that the housing sector will recover immediately after the second wave as work is being executed in-situ as allowed by the state government. Besides, the movement of construction material has remained unhindered during the current lockdown period. “We are confident that the housing sector will recover at the earliest,” he added.
