Though the marginal players are still suffering from funds crunch established players are slowly returning to normalcy in terms of scale of operations at construction sites. Construction levels for most of the developers have reached 70% of pre COVID levels with the lowest point during lockdown at 30% due to labour shortage.
For example, Oberoi Realty has reached 60% labour capacity. According to the company contractors have also become efficient and are using less people now. Sunteck’s under construction sites now have resumed and the company is on track to returning to pre-lockdown activity level soon. On the other hand, South based Sobha Ltd admits that the lockdown and subsequent reverse migration of labour had severely delayed construction work leading to extended project cycles and the dent on developer profitability.
Construction activity Godrej Properties’ sites has resumed on almost all its sites across the country, which had been severely impacted due to the complete lockdown for two months, followed by significant labour shortages which continue to be a problem for the company. The Company expects the labour count to increase gradually and plan to operate at approximately 70% of the pre-lockdown workforce strength by the end of the current quarter. According to the company, its construction time lines for various sites are expected to be delayed by six months due to this crisis. That number could change slightly depending on what may unfold over the next few months.
The realtors also expect the demand to pick up as interest rates have been one of the lowest for home loans and prices for real estate have been stagnant for 3-4years.
Meanwhile, for the first quarter, Oberoi reported a 94% decline in sales while Sunteck reported a 46% decline. Godrej, on the other hand, reported a 72% increase yoy given new launches and strong sales across geography.