COVID + Lockdown = Delay in Possession of homes
COVID 19 pandemic led to a nationwide lockdown, which brought a complete halt to construction activities too. However, construction has begun again, but delay in possession of homes is inevitable.
By Varun Singh
The lockdown because of COVID 19 pandemic forced most of us to lock ourselves. The entire nation had come to a halt.
Slowly things are starting, but the impact of the lockdown is expected to be felt for a very long time.
The COVID pandemic instilled a fear in the minds of people, and it impacted every thing.
Real estate industry been severely impacted by the pandemic. Migrant labourers the soul of the construction industry left for their natives.
Many of these labourers walked back to their home town, and as they walked far from cities, the deadlines for project completion got extended too.
This may sound alarmist, but is the truth that the real estate industry is looking at. 4.66 Lakh homes scheduled for 2020 delivery may miss deadline.
If not for COVID-19, the top 7 cities were to see the delivery of nearly 4.66 lakh units by 2020-end. Launched after 2013, many of the projects were in the final leg of completion. With almost zero construction activity in last few months due to the lockdown, the completion deadlines for almost all these projects has got extended.
Homebuyers will have to adjust to new realities, and that is delayed possession. Most state RERAs have already given a 6-month extension to developers on previously committed timelines.
Anuj Puri, Chairman – ANAROCK Property Consultants says, “As many as 4.66 lakh units were slated to be delivered in 2020 and another 4.12 lakh in 2021. Maximum completions (in both years) were to happen in NCR (approx. 2.40 lakh units). This region is set to witness more project delays over and above the backlog of over 2 lakh units already delayed in the region from before.”
Prior to COVID-19, the top 7 cities were to see completion of over 8.78 lakh units in 2020 and 2021 combined. Of this total expected supply, nearly 4.66 lakh units were to be added in 2020 and the remaining 4.12 lakh units in 2021.
- NCR was to see maximum completions in both years – of about 2.40 lakh units. Of this, 1.01 lakh units were to come up in 2020 and another 1.39 lakh units in 2021.
- MMR is second with nearly 2.10 lakh units expected to be delivered in two years – 1.07 lakh units in 2020 and nearly 1.03 lakh units in 2021.
- Bengaluru was expected to see delivery of nearly 1.51 lakh units in 2020 and 2021. This year the city was likely to see delivery of 1.01 lakh units while in the next year it was just half at nearly 50,000 units.
- Pune was to see completion of nearly 1.36 lakh units in both years – 69,000 in 2020 and 67,000 in 2021.
- Kolkata was next with nearly 59,000 units meant to be delivered in two years – 33,900 units in 2020 and nearly 25,100 units in 2021.
- Hyderabad was to see completion of more than 45,200 units in both years – 30,500 units in 2020 and another 14,700 units in 2021.
- Chennai had the least completions in both years – about 37,000 units. Of this, 24,650 units were to complete in 2020 while another 12,520 units in 2021.
“The Government must intervene to address multiple challenges including labour shortage in top cities. Even if developers have the financial strength, it will still take a while for most of them to resume construction because lakhs of labourers have left cities and migrated back to their villages. Moreover, many of the top cities are still grappling with the virus,” said Puri.