Covid-19 and the disruptions induced by the pandemic hampered the registration of new real estate projects across the state. Real estate developers in all the four major cities — Ahmedabad, Vadodara, Surat and Rajkot — registered fewer projects with the Gujarat Real Estate Regulatory Authority (GujRERA) in fiscal 2020-21.
The number of real estate projects — residential, commercial, mixed development and plotted schemes — registered with GujRERA declined by 22.8% to 1,346 in 2020-21 from 1,745 projects in 2019-20, shows data available on the website of the state real estate regulator.
The total investment proposed through these projects also plummeted by 28% to Rs 32,674 crore in 2020-21 as compared to Rs 45,490 crore in 2019-20. Real estate players attribute the drop in project registrations to the Covid-19 pandemic and the uncertainties induced by it.
“The nationwide lockdown last year eroded the first quarter (April-June) of fiscal 2021 as the real estate market had come to a standstill. The first half of the second quarter ending September was also sluggish in terms of demand. Again, there was a spike in cases soon after Diwali. This resulted in wastage of five months for the real estate market, which adversely affected project registrations by developers,” said Dipak Patel, past president, CREDAI Ahmedabad-GIHED, a body of Ahmedabad-based real estate developers.
Echoing similar views, builders in Vadodara, too, maintained that the pandemic, of course, had a big role to play in the declining project registrations. “The builders were ready with their projects and wanted to get them registered. But the Covid suddenly brought uncertainty to the real estate market over the last one year. Builders were unsure if people would be keen to invest in new property amid the pandemic that was wreaking havoc not just in the economy but also people’s lives,” said Vipul Thakkar, former president, CREDAI- Gujarat.
“Builders were waiting for the situation to normalize as once the project is registered under RERA then they have to meet deadlines regularly. Hence, the registration numbers dipped over the last one year. But the numbers will surely improve this year,” added Thakkar, a Vadodara-based builder.
Those in the realty market also blamed the delay in government procedures. “There were projects in the pipeline, but developers could not go for registering their projects as the process to get different approvals such as non-agriculture (NA) permission and building plan passing was hampered due to the pandemic as the administration was busy handling Covid situation. Developers were also facing staff crunch as well,” said Paresh Gajera, president, Rajkot Builders Association (RBA).
“The government offices were not working at full capacity due to the pandemic. There were delays in getting NA permissions and meeting other procedures and that also affected RERA registrations. The prime reason, though, is that builders were in a dilemma due to Covid and the uncertain period of the second or impending third wave,” said Pritesh Shah, president, CREDAI, Vadodara.
The realtors said the economy was down and people were losing jobs. There was this feeling that many would hold on to their savings instead of investing in real estate. But the RERA registrations will soon improve as the demand has picked up in the market.
According to Patel, the market had seen traction for some time before Diwali, and picked up well from January to the first week of March. In these periods, much unsold inventory was cleared and gave space for new projects.
“Given the impact of the pandemic on economic activities, I believe the 23% decline in registrations of real estate projects with RERA is not much,” said Patel.
With developers seeing latent demand and inventory getting cleared, the project registrations seem to have got traction. About 358 realty projects have been registered with RERA till June 19 from April 2021. The total investment in these projects is estimated at Rs 8,448 crore.
Speaking of the demand for residential housing, Balbirsingh Khalsa, national director industrial and logistics and branch director-Ahmedabad, Knight Frank India, a leading real estate consultant in India, said, “The demand, however, will be short-term in nature. The long-term demand depends on economic improvement.”
