COVID-19 affect on affordable housing projects

As per media reports, 4 lakh plus homes scheduled for completion in 2020 may miss their delivery deadline. Reasons for delay are owing to “multiple challenges, including labour shortage in top cities. Additionally, 4 lakh+ homes scheduled for completion and delivery in 2021 may also be affected.

To ensure that migrant laborers get work, some governments are allowing resumption of work on small construction and industrial construction sites where number of workers is 10 or less, provided these sites fall outside containment zones. Little or no construction work is on at most construction sites, with several lakhs of migrant workers making a beeline out of cities, and eager to get back to their home villages. In the months following the COVID-19 outbreak, the real estate regulatory authority in various states have allowed developers, a six-month extension to complete projects owing to a critical labour crisis that is currently holding the real estate industry to pay off.

As per media reports, 4 lakh plus homes scheduled for completion in 2020 may miss their delivery deadline. Reasons for delay are owing to “multiple challenges, including labour shortage in top cities. Additionally, 4 lakh+ homes scheduled for completion and delivery in 2021 may also be affected.

For affordable housing, which make more than 60% per cent of new supply in first quarter of 2020, main concerning factor was halt in construction activities. As segment relies heavily on timely completion of projects, halt during lockdown is likely to delay projects by up to 12 months. Situation is concerning as most buyers of affordable segments running on very tight budgets and cannot afford delays where they have to pay rents as well as the EMIs.

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