As Delhi NCR continues to grapple with a significant cloud of air pollution, the ongoing construction ban appears to have created challenges for developers, buyers, and laborers.
According to several industry players contacted by CNBC-TV18, "The real estate sector has been severely impacted by the construction ban in Delhi NCR due to air pollution guidelines. The ban is likely to result in a delay of 5-6 months in the delivery of housing units."
The real estate sector, which largely employs unskilled workers on a daily wage basis, has left laborers uncertain as they are currently unemployed, without salaries to survive on. This situation has forced many of them to migrate to their villages for survival.
Not only that, but the impact of the construction ban has ripple effects on other related sectors that supply materials to the industry, including cement, steel, marble, furnishings, tiles, fittings, and ceramics, among others.
"Developers have asked suppliers to put orders on hold as the movement of diesel vehicles has also disrupted the supply chain," shared several developers approached by CNBC-TV18, who preferred not to be quoted.
"Several lakhs of laborers have already migrated, and it remains uncertain for developers to provide them with a timeline, as we ourselves do not know when the guidelines will ease."
Meanwhile, according to Anarock research, “Currently there are as many as nearly 3,27,500 housing units under various stages of construction in entire Delhi-NCR. All these units have been launched in 2013 and beyond.”
Anuj Puri, Chairman of ANAROCK Group, says, “out of the total, nearly 125,000 units are under construction in Noida and Greater Noida, approximately 123,500 units in Gurugram, and the remaining 79,000 units in other cities, including Delhi, Bhiwadi, Ghaziabad, and Faridabad. Such periodic construction bans in response to poor air quality (such as that in NCR particularly) have serious consequences. On an average, a one-month ban on all construction activity delays a project by at least 3-4 months.”
“Amid New Delhi’s worsening air quality, the Delhi government has halted construction activities in Delhi. If this ban continues for a long time, it will definitely impact the timely delivery of projects. That said, this periodic ban has become a yearly phenomenon now and as such many developers already factor in the delay that will be caused due to the ban on construction. Hence, their project delivery timelines do consider this yearly construction ban,” Puri added.
Similarly, Vikas Wadhwan, CFO of Housing.com, shared, “The recent construction bans in Delhi NCR, aimed at reducing air pollution, present a significant challenge to the real estate industry. While crucial for the environment and the nation, these restrictions burden consumers. Project delays strain homebuyers, push developers into loan extensions, and increase obligations.”
“Drawing inspiration from China's proactive approach to address environmental challenges, we can lead in sustainable development without compromising our environmental responsibilities. It's time for state bodies to unite, finding solutions that balance environmental preservation and real estate industry vitality. Collaborative efforts and innovative thinking can create a harmonious ecosystem for all stakeholder,” he added.
Shri Venket Rao, Founder of Intygrat, said, "The construction ban, albeit necessary for mitigating escalating pollution levels in the national capital, presents a conundrum with cascading repercussions. Its one-month imposition, on average, resonates as a poignant delay, effectively elongating project timelines by at least two to three months, impacting builders and homebuyers alike. Despite the gravity of this situation, it becomes increasingly evident that soft activities, untethered from pollution contributions, must persist to continue the construction process. However, the disheartening reality emerges—year after year, the government proclaims unwavering commitments to curbing pollution, yet tangible results remain elusive. The perennial challenge we face beckons the imperative for swift and sustainable solutions."
(Edited by : Anand Singha)
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