Punjab realty developers sitting on huge unsold inventory

Vijay C Roy

Tribune News Service

Chandigarh, June 4

Slowdown in the economy coupled with distressful situation arising out of the Covid pandemic has hit the Punjab realty sector. The developers are staring at a huge unsold inventory of around 2.5 lakh nearly completed units, including flats, plots, independent floors and villas across the state. The projects are likely to be completed in another 6-7 months.

According to the developers, the demand is subdued due to restricted movement. “The pandemic has come all of a sudden and it has affected the real estate industry hard. At the moment, the demand is bleak and we don’t see any improvement in the current year,” said Jagjit Singh Majha, president, Confederation of Real Estate Developers Association of India (CREDAI), Punjab.

He said there are around 1.5 lakh unsold units, including flats, plots, independent floors and villas in Chandigarh Capital Region such as Zirakpur, Dera Bassi, New Mullanpur, Mohali, Kharar and Kurali. Across the state, the unsold inventory is around 2.5 lakh units.

“The industry is yet to witness a pre-Covid level demand due to the restricted movement of customers from other states such as HP and J&K,” said Prateek Mittal, executive director, Sushma Group.

According to the developers, there has also been a paradigm shift in buying behaviour of customers. “The customers prefer projects which are nearing completion,” said a developer. The nearly completed projects are those which are almost 80% complete and likely to be completed in another 6-7 months.

Compared to the residential sector, the demand for commercial space has been hit more as the corporates are in restructuring mode and looking at smaller offices with work-from-home culture slowly catching up.

However, the developers say this is the right time to invest. “The FD rates are low, stock market is volatile, and even gold has become dearer. Also, with low home loan interest rates, this is the right time to buy a property,” said Prateek.

The developers are of the view that the investors who have burnt their pockets in equity will now look to pick up real estate assets.

Marred by several issues, the developers expect a holistic solution to boost the demand. They said the government must grant industry status to the real estate sector, besides introducing single-window clearance as approvals consume a lot of time, thus delaying the project and putting a financial strain on them.

They also demanded policy innovation for triggering demand by introducing customer-centric tax treatment of real estate. In a letter to the Prime Minister, the CREDAI has stressed that the stagnant demand for housing is revived and further boosted by providing benefits to homebuyers to encourage investment in residential properties.