KAKINADA: Construction activity has been severely hit by the demonetisation of high denomination notes and work on many projects has come to a standstill. Builders are finding it difficult to source material and to pay the workers because of the cash crunch. Work at nearly 100 apartments has been halted after the announcement of scrapping of currency.
Though builders are offering low prices for apartments, buyers are not coming forward expecting the prices to decline further. The builders say traders, transporters as well as workers want hard cash as they do not have any swipe machines or online purchasing system. There are widespread fears that this might crash the real estate sector and prices of apartments.
The Confederation of Real Estate and Development Associa-tion of India (CREDAI), however, is optimistic. “The site rates might go down but a drastic fall in apartment prices is unlikely because the prices of raw materials like sand, cement and iron have not changed,” says chairman of Kakinada Branch of CREDAI, Mr G. Rayudu. He says builders are not in a position to construct the apartments by purchasing sites.
Majority of builders are going for only development-based constructions of apartments. However, he says, there may be substantial fall in sales of second-hand apartments. The construction activity is likely to pick up by March 2017 due to the momentum, he says. Registrations, too, have fallen drastically and the officials expressed their inability to meet their revenue targets for the current fiscal.
