Credai’s survey says 95 pc developers fear project delays due to second wave of COVID

The Confederation of Real Estate Developers’ Associations of India (Credai) on June 10 released findings of its first-ever industry survey conducted between May 24 and June 3 this year, to assess the impact of second wave of COVID-19 on real estate sector in the country.

A press release issued by Credai said, the survey witnessed participation of 4,813 developers from 217 cities, providing crucial insights on the industry sentiment and the range of challenges faced by the real estate sector.

According to the survey report, over 95 pc developers feel inevitable project delays if no urgent relief measures are injected in the sector by the Government and the RBI. These delays are attributed to a range of factors, with 92 pc developers experiencing labour shortage at sites, 83 pc working with less than half the workforce and over 82 pc facing project approval delays.

Commenting on the report, Harsh Vardhan Patodia, President, Credai National said, “The real estate sector showed tremendous resilience in bouncing back on a cautious recovery path post the first wave, despite little relief measures. However, the second wave has prompted us to reflect and re-evaluate the growth path of the industry, and we felt it was vital to assess the challenges faced by the customers and industry partners in light of the recent developments. The findings reveal that the second wave has had a more debilitating impact on the real estate sector than the first wave.”

Added factors such as recent spike in construction material including steel, cement etc. have contributed to more than 10 pc increase in construction cost for more than 88 pc developers. Various financial constraints and liquidity crunch are further adding to the problem, with 77 pc developers experiencing issues in servicing of existing loans, 85 pc developers facing disruptions in planned collection, and 69 pc are facing issues in disbursement of customer home loans.

The survey findings by the apex body also put spotlight on changing consumer behaviour, resulting in slowing of demand due to decrease in enquires and site visits. A staggering 98 pc developers are facing reduced customer enquiries and 42 pc are experiencing 75 pc decline in customer enquiries. Furthermore, the report reveals that the second wave has caused 95 per cent of customers to postpone their purchase decisions.

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Patodai further said, “We have made a representation to the Government citing the current survey and requesting the Government to infuse urgent financial stimulus and initiate quick progressive measures to assist recovery. As a part of our presentations, we have requested for liquidity infusion, one-time restructuring of loans, across the board six months extension of completion date by RERA, stamp duty reduction or waiver, moratorium extension on principal & interest for six months, and freezing of SMA classification for another year.”

Patodia was hopeful that “the Government will consider our appeal and will make urgent interventions this time.”