CHENNAI: It was a year of survival for the real estate sector which was struggling to come to terms after the 2015 floods. While optimism was on the cards, the subsequent Covid-induced lockdown, shattered many hopes. As the realty sector came to a standstill, the biggest challenge for the developers, was to manage the migrant workforce, who were forced to retire in labour camps during lockdown.
Later, the government sent them home by trains. It was a blackout phase for the construction sector for nearly five months. After the lockdown was eased, the focus was on bringing back the affordable and skilled migrant workers.
Many developers hired private buses to bring back these workers as they wanted to meet the projects deadline, despite the Tamil Nadu Real Estate Regulatory Authority enforcing ‘Force majeure’ (calamity caused due to nature) clause, under Section 6 of the Real Estate (Regulation and Development) Act 2016 and giving six-month respite.
Siva Krishnan, managing director, Chennai and Coimbatore, and Head Residential Services, JLL, says new launches in 2020 bounced back to 92 per cent of launches that happened in 2019, while sales reached 140 per cent of the pre-Covid era. This momentum is expected to continue in 2021.
But the developers are facing new challenges- prices of construction materials have increased and so to the steel prices. As a result realty sector projects are now on go-slow mode. Most of the projects is likely to begin only from next year as developers are hoping for some announcement from the government during the budget session of parliament. However, the most important challenge is a complete or partial loss of income at the household levels. With the depletion in income and a compulsion to live off reserves, the ability to make large investments such as buying homes erodes for a substantial length of time.
Meanwhile, the commercial office space sector also underwent changes as work culture was re-invented. Industry sources say for the next two years, real estate office absorption in India is going to be impacted because of work from home. It would be around 20-25 per cent for the next two years.
Workforce and businesses would adapt a combinations of work from home, work from an office environment - flexible workspaces. The excess real estate capacities especially in and around residential neighbourhoods like T Nagar, Anna Nagar, Mogappair, OMR are enquired to be picked up as ‘shared office spaces’ for small and medium workforces.