More than 4,000 real estate projects in big cities and towns in Andhra Pradesh have come to a standstill due to the Covid-19 lockdown. Experts of the realty market are of the opinion that the sector may face some challenges over the next few months.
They feel that investment from NRIs (non-resident Indians) may help the sector out of the crisis, especially in bigger cities such as Vizag, Vijayawada, Guntur and Tirupati.
Prices of real estate may go down in some areas once the lockdown is lifted. The real estate sector has been under pressure for quite some time now owing to a shortage of sand and other issues. The situation had just begun to improve when the coronavirus brought all projects to a complete standstill.
K Subba Raju, chairman of Credai-Andhra Pradesh said that the real estate industry is the second largest contributor to GDP and creates a lot of employment. He said that nearly 4,000 projects worth crores have got stuck due to the lockdown.
“We think the post-lockdown scenario will be challenging for the real estate sector for at least a few months. We hope that the situation improves. There are indications that some NRIs could return to AP and purchase property,” he said.
According to a section of builders, the post-Covid-19 period would see an insecure job market with revenue sources drying up and people’s purchasing power declining. As a result, they say, many may post plans.
B Ramachandra Rao, a builder said, “If the lockdown were to extend even after May 3, we’ll see salary reductions and job cuts in most sectors. Banks will exercise caution while giving out loans. The real estate and allied sectors will have to face many challenges.”
However, realty prices in cities like Vizag may not come down, according to B Srinivasa Rao, president of Credai-Vizag because of increasing construction costs.
The proposed shifting of the secretariat from Amaravati to Vizag has affected an increase in prices of apartments and land plots in Vizag. The prices have gone up by Rs 500 to Rs 700 per square feet. While the prices may come down a little, builders might still find it difficult to sell after the lockdown.
