COVID-19 pandemic brings realty sector to a grinding halt in AP

Deccan Chronicle.  | dc correspondent

Business, Market

The real estate which was already facing a slump due to the Three Capitals decision was mired in a neck-deep crisis due to the COVID crisis

The real estate business was on the top following the announcement of Amaravati as the capital in 2015. (Representational image: AFP)

VIJAYAWADA: The lockdown-induced slump has dealt a grievous blow to the reality sector in AP state. As the finances of the people were in a dire state, the long-drawn-out market inactivity has shattered the dreams of real estate businessmen and prevented further development. The real estate which was already facing a slump due to the Three Capitals decision was mired in a neck-deep crisis due to the pandemic crisis.

The real estate business was on the top following the announcement of Amaravati as the capital in 2015. A frenetic pace of activity was witnessed till 2019 when the announcement of Three Capitals was made by Chief Minister Y.S. Jagan Mohan Reddy. The announcement put paid the ambitious dreams of the sector in the capital region. Later, even the plans of Three Capitals received a rude shock with a stay by the courts.

The Corona crisis slashed incomes, closed many businesses and trades and plucked jobs and further caused the unexpected and costly Covid treatment burden on the fragile finances of the people. This forced most of the people to defer land and house purchasing activity, leading to a huge slump in the sector for the past 14 months.

Further, the threat of third wave is dangling like a Damocles’ sword on the already hard-hit construction sector and allied fields. The construction field is the only unorganised sector contributing about 12 per cent employment after the agriculture sector in the country. It further contributes 8 to 10 per cent of the nations’ GDP with 25 various fields connected to the construction field directly and 240 industries indirectly.

According to the representatives of real estate companies, thousands of apartments and commercial complexes are lying vacant in AP due to the slump as a result of the Corona crisis. Further, banks and other financial institutions are wary of extending loans to buyers at this stage. The realtors expect revival to happen only the Corona was reined in the country.

CREDAI AP chairman (media affairs) R.V. Swamy said the construction field had been totally in slump for the last one-and-a-half years. He explained that first it was badly affected due to the Three Capitals announcement and next due to the pandemic Corona crisis. He said nearly 10,000 apartments and 500 commercial structures were ready to occupy, but there were no takers for them. He urged that banks come forward to offer liberal loans to consumers so as to boost the sector. He sought that the government reduce the stamp duty from 7 per cent to 3 per cent. The registration charges are also higher than those in neighbouring states.

Builder P Naresh said that construction material costs increased abnormally during the past two years which created hurdles for the businessmen to complete the ongoing works or take up new ventures. He stated that first there was sand problem and before it was resolved the Three Capitals issue raged. And then came the Covid brought the reality activity to a grinding halt.

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