Anarock Property Consultants said lockdown due to coronavirus spread has stalled construction across the country and the home buyers should expect project delay. More than 15.62 lakh units are under construction in the top 107 cities of which Mumbai Metropolitan Region (MMR) and National Capital Region (NCR) together comprise 57% or 8.90 lakh units.
Pune has nearly 2.62 lakh units under construction followed by Bangalore with 2.02 lakh units and Kolkata with 90,670 units. Moreover, Chennai and Hyderabad together comprise just 8% (about 1.18 lakh units) share of overall under construction units.
Anarock Property Consultants Head (Research) Prashant Thakur said with most top cities announcing a lockdown till at least March 31, homebuyers must brace themselves for project delays.
A lot is currently at stake for Indian residential real estate as cities go into complete lockdown mode to battle the spread of COVID-19. Developers tend to schedule project launches during the auspicious festivals of Gudi Padwa, Akshaya Tritiya, Navratri and Ugadi. The strict advisories for complete lockdown across cities will impact housing sales during the upcoming festivals, usually considered auspicious by several home buyers to buy homes.
“Another fallout of the lockdown is that many key markets will have almost zero construction activity at the project sites. This will further strain several developers’ financial health. As many as 15.62 lakh units across the top 7 cities were in various stages of construction as of 2019 year end. These include all under-construction units launched between 2013 till 2019-end. Even this figure is conservative – the number of units will be higher once Q1 2020 data comes in,” said Thakur.
Anarock in its research said once the crisis is under control, the Government will have to dole out various economic measures to bail out severely-hit sectors, reconsider its fiscal deficit targets and start spending. ‘’That said, since this is a crisis with Pan-India ramifications, all impacted projects will have to be excused from construction delay penalties under the respective state RERA,’’ it added.