- NCC Urban MD Narayanaraju Alluri Special Interview
NCC Urban MD Narayana Raju Alluri said that with a high percentage of software companies adopting the Work-From-Home culture, the demand for office space will continue on downward trend for another year. However, he clarified that the demand for residential properties will continue and the prices of flats are unlikely to go down in near future considering the rising construction costs.
Talking to Real Estate Guru on the impact of the second wave of Corona virus and the latest developments in the construction sector of Hyderabad, Narayana Raju shared his insight into the realty market. Excerpts from his interview:
The construction industry was badly affected due to the second wave of Covid-19 pandemic. Prices of construction materials such as steel, cement, cables and PVC materials are all skyrocketing. Cement grew by 40 per cent, steel by 30 per cent and other construction materials by 20 per cent during the pandemic. The shortage of labour has only become worse and the developers are being forced to spend more money on the labour force. Moreover, the work site as well as the residential quarters of the workers are being kept clean and sanitised in accordance with the Covid norms apart from constantly monitoring their health condition and providing necessary treatment.
Under these circumstances, sales plummeted as majority of buyers are not coming out of the comforts of their homes and postponing property purchases. Banks are also working with minimal staff, which in turn is delaying the disbursement of housing loans. All of this resulted in an inordinate delay in progress of construction work. Transportation of construction materials also became an issue during the lockdown.
Price rise likely in one-two months
Many buyers are alarmed about the Covid Delta variant. They are hesitant to visit the construction projects these days when compared to the Pre-Covid era. However, our company executives are reaching out to prospective buyers and some of them have even bought flats during the pandemic. But many are anticipating a decline in the prices of flats under these circumstances. They must understand that there would be no fall in realty prices. Instead, prices could escalate further in just couple of months considering the increased construction cost. In fact, a large percentage of developers are forced to increase the prices. Majority of realtors have not increased the prices during the pandemic to ensure that the work continues smoothly. But, it would not be long before they hike the price.
It will take at least six months for the construction sector to fully recover from the Covid-induced crisis. Home buyers might take some more time to show the enthusiasm to invest in properties. Banks are granting loans quickly for trouble-free projects, but are many banks are offering loans based on additional security, land, and personal surety which has been delaying the construction work.
NCC’s projects
We are currently working on projects in Hyderabad, Bengaluru, Chennai and Ranchi. We are developing 30 lakh sq ft of space in Narsingi. Six towers have already been handover. The rest will be delivered within another year-and-half or two years. The 8 lakh sq ft apartment in Bengaluru will be completed within a year. We are carrying out two villa projects on Elahanka and Sarjapur Road. We are building two apartments in Omar and Pallavaram in Chennai.
We are building about 1800 flats on 55 acres in Ranchi. In the first phase, 1200 flats were constructed and handed over to the buyers. 600 flats are under construction in the second phase. We will complete it tower-wise in another two years. In total, we have completed almost 16 projects in the southern cities so far. In addition to Hyderabad, we have developed 80 lakh sq ft of space in cities like Bengaluru, Chennai, Kochi and Guntur. We are also coming up with another major project in Ranchi.
We are planning to develop five projects with nearly 40 lakh square feet of space in Bengaluru and Chennai alone. Many other projects are in the approval and documentation stages. Finally, I would like to suggest that there could be no better moment for home buyers to purchase their dream home or invest in one as the interest rates too are very low. Hyderabad, Bengaluru, or Chennai – they could invest anywhere and expect good returns within no time. People must remember that the prices of flats will only increase in future.
