The real-estate sector in Andhra Pradesh is set to be hit by another wave of low-demand and price-correction as buyers struggle with economic uncertainty. On the other end, developers are battling to complete projects stalled by the shortage of skilled manpower and increasing input costs.
The mass departure of skilled migrant workers, after hurting the industrial sector due to Covid-19 lockdown, is now beginning to hit the real estate sector in Vizag, Vijayawada, Tirupati and other cities and towns in Andhra Pradesh.
Speaking to TOI, K Subba Raju, chairman of Confederation of Real Estate Developers’ Associations of India (CREDAI), Andhra Pradesh, said that Covid-19 lockdown has stalled 3,000 to 4,000 real estate house projects at various stages worth crores of rupees in the state.
Though the government has allowed the resumption of construction activity after lockdown restrictions are eased, the industry faces several challenges. “As the majority (over 70 percent of masons, carpenters and others) of the workers who engaged in the real estate sector are migrant workers, the revival of the construction business amid easing of lockdown is possible only after the return of the migrant workers. We don’t know when the migrant workers will return. We are expecting that it will take at least six months to resume construction work,” Subba Raju added.
The price of a cement bag has increased by about Rs 80 to Rs 100. Before the lockdown it was Rs 300, now it is Rs 380 to Rs 400. Similarly, the price of steel has increased by around Rs 2,000 per metric tonne and the price of gravel increased by around 20 to 40 percent in the state. The real-estate sector is facing a sharp increase in construction costs and buyers’ despondency.
“The shortage of skilled workers and severe liquidity crunch in the market has further lead to projects being stalled. Builders are struggling with low capital inflows and that will impact the delivery of projects,” said B Srinivasa Rao, president of Vizag city unit of CREDAI.