Bengaluru: Realtors hopeful of getting business back on tracks

Bengaluru: Real estate sector is hopeful of completing the projects which have been in the pipeline for a long time as labourers who left for their native places in Bihar, Assam, Uttar Pradesh, Bengal and rural parts of Karnataka, after lockdown came into force are returning with restrictions being eased in phases.

However, one of the major issues impeding the projects is the shortage of manpower.

Errol Fernandes, Vice President, CREDAI, Bengaluru, said, "We are now seeing a migration of labour from the construction sector to other segments of the industry as the business cycle has turned around in the country.

Since the government has increased the pace of infrastructure development, many workers from the real estate industry are in demand in the other segments of the construction sector as well. Hence, tremendous pressure has been put on the supply of labour. This has resulted in the rise of wages from Rs 600 per day to Rs 800 per day for unskilled workers. There is also an acute shortage of skilled labour."

Fernandes said that with oil prices increasing to $70 per barrel, buoyancy in oil based economies in the Gulf is inevitable. "With construction labour over there being paid higher salaries, migration to the Middle East is inevitable in the coming weeks and months, putting further pressure on the availability and local cost of labour," he added.

Dr Prashanth Reddy, Managing Director, Fundermax India, is of the opinion that many workers are stuck in their native places waiting for their turn to get vaccinated.

"Once the lockdown is further eased in a couple of weeks, they should start returning. We believe they would have already taken at least one dose of vaccination by now. Their incomes have dropped after they have gone back home due to the lockdown. The government Codes - Industrial Relations Code (IRC), Occupational Safety and Health and Working Conditions Code (OSHWCC) and Social Security Code (SSC), have given them benefits such as universal minimum wage, social security, trade union recognition, etc. However the entire process is slow, considering the size of the migrant worker population," he added.

Prashant Reddy stated that partial easing is relatively better considering the high number of cases. However, for the economy to bounce back, he opined that everything should open up and customer confidence should come back.

"We are confident that the economy would start looking up from August when the festival season begins. We are really hopeful as a lot of projects which have been suspended due to the lockdown restrictions, are partially back on tracks," he said.

Elaborating the loss the sector suffered he stated that barring some, every sector has been seriously impacted and all the more so with the MSME sector.

"We are still at 50% of 2019 revenue but better than 2020.We are well prepared in the year 2021 with all the right investments in stock and people," Reddy remarked.

Darshan Govindaraju, Director, Vaishnavi Group, told this newspaper that the exodus of migrant workers during the second lockdown was not as severe as the one during the first one. Developers were better prepared this time around and organised food, shelter, medical assistance and support to the migrant workers at site.

"The government had allowed construction activities to commence, with certain restrictions. This ensured that the work at sites was not adversely affected and allowed for a quicker resumption of work. From a purchaser's perspective, enquiries from home buying customers have been steadily flowing in even during the lockdown, and we should see those enquiries materialising into sales now.

The Covid-19 pandemic has affected businesses and people across sectors in our country. With the vaccination drive in full swing across the country and a drop in the number of active cases, we are expecting a recovery in the real estate market by Q3 FY 21-22. The sentiment in the near future remains positive," Govindaraju explained. Taking a lesson from the first wave, Priyadarshi Mishra, CEO & Founder, Design & Construct, somehow managed to retain the labourers at site during the second wave.

"Since there are no restrictions on the movement this time, labourers have started coming back to resume their work. Indeed we as a startup company are facing a lot of challenges due to increase in price of material and wages. We have suffered losses in terms of margins going down and profits being marginalized," Mishra added.