CREDAI Survey Reveals Deep Impact of COVID 19 on Construction
The Confederation of Real Estate Developers' Associations of India released findings of an industry survey conducted across North, East, West and South zones between 24th May and 3rd June, 2021 as Covid Impact Analysis Report, to assess the impact of second wave of covid-19 on real estate sector in India. According to the survey report, over 95% developers feel inevitable project delays if no urgent relief measures are injected in the sector by the Government and RBI. These delays are attributed to a range of factors, with 92% developers experiencing labor shortage at sites, 83% developers are working with less than half the workforce, and over 82% of developers are facing project approval delays. Credai Persident Mr Harsh Vardhan Patodia said “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 materials including steel, cement etc have contributed to more than 10% increase in construction cost for more than 88% developers. Various financial constraints and liquidity crunch are further adding to the problem, with 77% developers experiencing issues in servicing of existing loans, 85% developers facing disruptions in planned collection, and 69% are facing issues in disbursement of customer home loans.
Credai has requested for liquidity infusion, one-time restructuring of loans, across the board 6 months extension of completion date by Rera, stamp duty reduction or waiver, moratorium extension on principal & interest for 6 months, and freezing of SMA classification for another year. The apex developers' body also feels that reducing cost of construction materials, implementing single window clearances for project approvals and work commencement, and allowing input tax credit for all sectors will help the business.
The survey was conducted with stratified sampling method and witnessed a first-of-its-kind extensive 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.