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Covid lockdown: The grim reality of NCR realty

Covid lockdown: The grim reality of NCR realty

Migration of labour has further compounded problems for builders, who expect it will require 2-3 months to mobilise workforce once lockdown is lifted. Even half-complete projects would be difficult to finish by December this year.

Over 68,000 houses, that were to be delivered to buyers in 2020 in the Delhi-National Capital Region (NCR) are unlikely to be completed due to the halt in construction activity during the nationwide lockdown and the national green tribunal ban (NGT) during the November-December 2019 period, leading real estate developers and consultants told ET.

And the migration of labour has further compounded problems for builders who expect a 2-3 months time-period to mobilise workforce once lockdown is lifted and what that means is even half complete projects would be difficult to finish by December this year.

“Unfortunately construction sites were shut for majority of last 6 months , earlier due to NGT ban in Delhi NCR and now due to Covid 19. Also slowing sales and collection momentum will delay further project deliveries as builders will have arrange more funding,” said Nayan Raheja of Raheja Developers.

The National Green Tribunal (NGT) had banned the construction activity in NCR on November 4, 2019, due to poor air quality. A month later, on December 9, it partially lifted the ban and allowed construction between 6 am and 6 pm. Complete ban was lifted on February 14 and just when the developers were mobilising the workforce, lockdown came into effect.

According to an study by property consultant JLL, about 3 lakh houses in NCR will get delayed due to the lockdown of which 1.24 lakh are under mid segment (which sells the most).

Real estate Disruption

This doesn’t include 2 lakh units that are on the stalled project list.

“Mid-segment accounted for 41% of the total 3.03 lakh under construction residential units in Delhi NCR. These are at various stages of construction. Maximum proportion (66%) of these 1.24 Lakh mid-segment under construction residential units are concentrated in Noida and Greater Noida. Ghaziabad also has a sizeable proportion (22%) of under construction mid-segment units,” said Shweta Kakkar, Senior Manager – Research, JLL.

“COVID19 has disrupted supply chains on an unprecedented scale. We have already applied for occupancy certificates for our residential projects scheduled to be delivered this year. Further, for our other projects, we are in the process of assessing the ways to make up for the time lost due to lockdown and mitigate the supply chain issues,” said Pankaj Bansal, Director of Gurgaon based M3M Group.

There are more than 57,000 unsold mid segment residential inventory in Delhi NCR. Maximum quantum (69%) of it is concentrated in Noida and Greater Noida and these two areas also have a number of stalled projects.

Also a major concern that is gripping Delhi NCR residential market is the resumption of construction in the on-hold projects. “Overall delay would be in the range of 6-9 months which means the chances of delivery this year is very less,” said Pradeep Aggarwal, Founder & Chairman –Signature Global.

Source

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Axiom Landbase

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