CREDAI Hyderabad braces for the COVID-19 Challenge

CREDAI Hyderabad braces for the COVID-19 Challenge

·         Hyderabad Realty to bounce back soon

·         Hyderabad has strong consumer demographics and has shown significant growth in IT, ecommerce and retail sector

·         Seeks Government support on key issues to help revive the sector and protect the interests of the end users

The Confederation of Real Estate Developers Association of India (CREDAI) Hyderabad leadership team led by Mr. P. Rama Krishna Rao, President, Mr. V. Rajashekar Reddy as General Secretary discussed the key challenges faced by the real estate sector in the city presently and highlighted the inherent growth stimulators which will act as a catalyst to fuel the economic and real estate growth. 

Effects of COVID-19 are felt around the world, the real estate companies are being impacted due to the challenges of stoppage of construction, shortage of labor, difficulty in sourcing raw materials, and other issues. Delay in approvals for water and electricity is also causing inconvenience to the industry and the home buyers. The impact of lockdown and COVID 19 is causing innumerable problems to the sector which is dampening the real estate growth in the city. 

The leadership team of CREDAI Hyderabad recently met Mr. KT Rama Rao, Hon’ble Minister for IT, E&C, MA&UD, Industries & Commerce Government of Telangana, and sought his intervention in helping resolve the same to help the industry deal with COVID-19 crisis. The minister appreciated the real estate sector for their efforts to support construction labour during the lockdown period. He assured CREDAI officials full support for most of the requests and instructed the officials to issue suitable orders. For some issues, not directly under his purview, he assured to take the issues to the Hon’ble Chief Minister to seek his intervention and getting things resolved at the earliest. 

The real estate players have introduced optimization strategies to mitigate the present-day impact. As the situation gets normal and the business recovery gaining momentum the real estate sector   will start recovering at a much faster rate as compared to the other metros in the city.

Speaking about the impact of the COVID -19 crisis and its impact on the real estate sector Mr. P Ramakrishna Rao, President, CREDAI Hyderabad said, “COVID – 19 is an unprecedented occurrence, which has severely impacted business and individuals alike. The lockdown imposed to contain the spread severely impacted the construction activity and caused delays in the plans for the developers impacting both the developers and homebuyers. With unlock-1, we are faced with numerous challenges but we are determined to get the industry back on track. Building permissions, tax issues, labour shortage and price escalations of raw-materials and other issues are crippling our growth and are a major concern for all developers. We had met Shri KT Rama Rao to discuss the challenges faced by the sector and steps to be introduced to bring in a positive outlook in the market. Our meeting was very effective and he has assured us full support.” 

He further added, “Hyderabad real estate holds tremendous potential for significant growth with many major infrastructural developments like the outer ring road constructed, construction of arterial roads connecting ORR has proven to render a multi-dimensional stretch to other places. Construction of strategic flyovers and rapid transit zones on the bottlenecks in the city would add to the convenience of travel and impact growth and recovery in the post COVID era. Gachibowli, Financial District, and Hi-tech corridor have become a commercial space with major IT companies, and expanding with the emergence of new office spaces & retail outlets would continue to fuel the growth. The GRID Policy would also help decongest the western part and help in the overall development of the city. In the past few years, the unsold residential inventory in Hyderabad has declined at an overwhelming rate. We are very confident that the city will recover from the impact of COVID-19 faster than many other cities across the country.”

-          Adding to this Mr. V Rajashekar Reddy, General Secretary, CREDAI Hyderabad said, “COVID-19 pandemic has severely impacted the real estate sector. Before the COVID-19 pandemic, Hyderabad was leading the country in absorption of the commercial real estate and co-working spaces. The residential segment was also growing much faster than the rest of the country. As per the data from TS RERA authorities in 2017 around 219 projects with 21,665 units were registered with the authority which increased to 448 projects with 31,559 units with a total construction area of 53,496,875 Sft (approx. 53.5 Mn SFT). With an estimated investment potential of Rs 31,379 crores (as on March 2020) the outlook for the real estate is very positive and will witness unprecedented growth in the next 3-5 years. With Unlock 1 in place, the market sentiments are getting positive and the buyer's behavior is becoming buoyant. We are sure, the recovery from the COVID-19 will be much faster in Hyderabad as compared to the rest of the country due to its strong business fundamentals, infrastructure, low-rates for rentals, and proactive governance across levels.”

-          He further added, “Hon’ble minister Shri KT Ramarao has initiated immediate action on our requests and suggestions to help us navigate the COVID-19 crisis and drive the real estate sector in the city on an upward spiral. Based on our requests the Government has issued 4 GOs which has come as a huge relief to the sector. Moreover, the Government of Telangana has also done remarkable work during the lockdown by building city infrastructure and completing pending civil projects. These series of initiatives and support mechanism by the Government will create a stimulating environment for growth and establish us a future-ready city with smart investment opportunities.”

Key Points:

-           Permission to pay Development and Impact fee in instalments (GO Released)

-          An extension of building permissions by 12 months without additional fee (GO Released)

-           NALA Tax to be payable to the sanctioning authority like the sinorage charges to the mining department to remove the delays in NOC, etc. (under consideration)

-          To boost the buyer confidence a request to speed up registrations for consumers & buyers.

o   Limited period waiver of 2% stamp duty for registration. (under consideration)

o   Relaxation in the effective date of Mutation condition, required for getting electricity & water supply and relax levy of property tax by 6 months to help the end-users. (under consideration – minister assured to help get water & electricity supply in 2 weeks)

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