In a major move to revive at least some economic activity, the central government has given the permissions to the real estate sector to resume construction in the non-COVID-19 hotspots.
This, however, can only be done by adhering to the guidelines provided by the Centre as well as by the states. These include rules like thoroughly maintaining social distancing, no construction worker should be brought to the site from outside the city and only those workers who are currently available on the site will be allowed to resume work.
Considering the ongoing scenario, the move to start at least some of the construction activities on project sites, even with a limited workforce, is certainly welcomed. That said, as many migrant workers had left for their villages post the first lockdown (March 24 to April 14) announcement, we will have to wait and see how many are actually left back to resume work.
Currently, at least 80 per cent of the total workforce of 44 million in the entire construction sector are migrants. This will definitely help the real estate sector to some extent.
However, the fact that COVID-19 hotspots will not be able to resume activity from April 20 is a dampener for markets such as the Mumbai Metropolitan Region MMR—a highly-impacted zone which, as per ANAROCK data, currently has the highest under-construction residential stock of nearly 4.65 lakh units. This accounts for 30 per cent of the overall 15.62 lakh under-construction stock across the top seven Indian cities.
As far as construction activity in non-hotspots is goes, developers will need to focus on resuming construction on projects that are already nearing completion and have a completion deadline within 2020.
Anuj Puri is the Chairman of ANAROCK Property Consultants.