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The impact of COVID-19, the global pandemic which has been causing havoc across nations, has been felt across almost every sector. The real estate industry has been no exception, being affected heavily and construction activities forced to be stopped in order to contain the pandemic. The real estate sector, which was reeling under a severe liquidity crisis for the last few years took a major hit. However, there is finally a relaxation for the real estate sector as the government announced the resumption of construction activities in certain regions.
On 15th of May, the government announced that developers can continue their construction activities in the non-hotspot regions. Additionally, a set of guidelines to ensure safety and efficiency has also been announced. This move is a major revival for the sector and has been greatly appreciated by the developers. This sends out a relief message for not only the developers, but also buyers, investors and employees.
The economy would also be receiving a major boost as a result of the resumption of construction as the lockdown has severely crippled business activities, which has taken a toll on the economy. The projects which are nearing completion would attract investments, thus ensuring cash flows to resume once again. The real estate sector plays a key role in the Indian economy and its revival would be a major boost. It is expected that the developers would use this opportunity to quickly finish the projects that are almost complete, so that they can sell off some of the inventory to ensure the inflow.
Moreover, another problem that the realty sector has been facing due to the lockdown was the unavailability of raw materials. Since the lockdown started, only essential goods were allowed to be transported, which implies that the developers couldn’t acquire the raw materials for construction. However, the government has now revised the rule, allowing the transportation of both essential and non-essential goods.
The real estate sector employs over 12% of India’s workforce directly. The lockdown had resulted in the unemployment of workers, many of whom are daily wage earners. The resumption of construction activities would help them get back on track. However, it is projected that right now the morale is low and the workers might not be fully productive. This is because about 80% of them are migrant workers and are under stress as they are unable to return home during the lockdown. However, the developers would have to ensure proper sanitation and safety measures to ensure that the construction activities can carry on smoothly again.
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