At a time when Chennai’s skyline was opening up to robust real estate projects, the novel
coronavirus outbreak put an end to it, leaving the sector to bleed. Realty projects are now delayed in the Chennai Metropolitan Area as construction workers had to suspend work and
prospective buyers put a hold on real estate investments like flats for sale in Manappakkam, owing to the area being a COVID-19 hotspot. Apart from that, the construction work in various other areas within the city limits has come to a standstill.
Industry sources said realtors are apprehensive of a slowdown as the impact is likely to be felt beyond the lockdown period. “The future seems uncertain,” said Mohan Karta, owner of Moserve real estate. Prospective buyers have lost interest after the Covid-19 outbreak took a toll on the markets. “Registration offices are closed and people who showed interest are now buying time,” he said. With the future looking grim for construction businesses, existing projects may be a ray of hope for those investors looking for opportunities. The pandemic, causing a financial hurdle for a huge portion of the population may, in hindsight, lead to an
increase in renting homes rather than buying in the long run. For such cases, reasonable and easily available opportunities like flats in Thirumullaivoyal along with other such
properties can pave the way for a feasible ROI.
The sector took a hard hit just when the Chennai Metropolitan Development Authority
(CMDA) had doubled the number of planning permissions for housing under special category buildings, raising it to 84 in January and February. The number was 28 in the
corresponding period last year. While the Tamil Nadu Combined Development and Building Rules was also introduced for massive vertical growth, everything has gone for a toss now with the demand for new housing hitting a new low.
Developers of ongoing projects, however, are keeping their fingers crossed. C Chandran,
partner of Elegant Constructions observed that real estate will get the least priority during such trying times. “Two projects of mine in south Chennai were nearing completion, but the number of inquiries and bookings has been zero for the past one month,” he said.
The demand for office space which was high even a year after record absorption of 6.2
million square feet last year Chennai, is also going through a similar lull. CMDA has given
nod for constructing multi storey buildings in an area of 41.2 lakh square feet in the past two
months, which is 140% more when compared with the same period in 2019. As several IT
parks are in the pipeline, the market was expecting absorption of five million square feet of office space this year. Managing Director of Olympia Group Ajit Kumar Chordia said March and April will be a washout. “We are expecting a revival in June. But it depends on how the US market reacts,” he said.
Covid-19 has also put the labour intensive sector under stress as 50% of construction
workers, who are largely hailing from north and eastern states, have moved to their hometowns over fear of contracting the disease.
Developers with finished projects may also face difficulties to look for potential buyers,
especially in well-populated residential areas. Nevertheless, opportunities are still available –
apartments in Ambattur can prove to be a great deal in terms of investments. Confederation of Real Estate Developers’ Association of India (CREDAI) Tamil Nadu chapter chairman S Sridharan said construction projects would be delayed due to paucity of manpower and non- availability of construction material. “It is an unprecedented scenario for real estate. Developers would be hit because cash and fund flow would be a major issue as banks would release funds only after completion of every stage.”