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Demand Drivers of 2024
Delhi Development Authority already had 16,000-plus flats in its old unsold inventory as they were not selling due to an inconvenient location with no Metro connectivity and extremely small sizes. But that did not deter DDA from making another 24,000 units! The value tied up in these 40,000 flats is Rs 18,000 crores or Rs 180 billion. By this estimated value the flats would be in the range if Rs 45 lacs odd or Rs 4.5 million. Our housing shortage is 19 million housing units currently which is expected to double by 2030. At this rate with the Government trying to play 'builder' we will see housing units pile up as unsold inventory and a ballooning deficit in housing units.
However, public sector unit NBCC is proving to be an outlier as it recently announced sales of 5,000 units for Rs 2,900 crore thus completing 80% of the inventory across several residential projects of erstwhile Amrapali Group where it was appointed as a project management company under the supervision of the Supreme Court-appointed court receiver.
According to NBCC, there were 46,575 apartments across 25 housing projects and out of that 8,416 units were already occupied by home buyers prior to the Supreme Court judgment in July 2019. NBCC got the mandate of completing the remaining 38,159 units and the pending common facilities in those projects where 8,416 units were already delivered with an estimated cost of Rs 8,266 crore. NBCC expects to complete all the projects by March 2025 as per its CMD K P Mahadevaswamy.
Meanwhile CIDCO in Maharashtra, has given a final extension to the defaulter applicants of Mass Housing Scheme 2018-19, who have not paid the instalments of the tenement, to pay the entire amount of their respective tenement along with delay payment charges. The last date for making the payment is January 10, 2024.
While there are several other schemes rolled out by several states, none can match the Pradhan Mantri Awas Yojana scale and execution. As elections are nearing the execution is turning feverish.
In order to achieve the target of “Housing for All” in rural areas, the Ministry of Rural Development is implementing Pradhan Mantri Awaas Yojana- Gramin (PMAY-G) with effect from 1st April, 2016 to provide assistance to eligible rural households with an overall target to construct 2.95 crore pucca houses with basic amenities by 31st March, 2024. Against the mandated target of 2.95 crore houses, more than 2.94 crore houses have already been sanctioned and construction of 2.50 crore houses has also been completed as on 29.11.2023. Under Pradhan Mantri Awaas Yojana - Urban (PMAY-U) which is a demand driven scheme without a target for construction of houses, a total of 118.63 lakh houses have been sanctioned under PMAY-U; of which 78.15 lakh houses have been constructed/delivered as on 20.11.2023. The scheme period which had earlier set a deadline of March 2022 has been extended up to December 2024.
Given the actual physical delivery of 2.94 crore rural houses and 1.19 crore urban houses, the infusion of welfare has sown the seeds of demand for cement and other building materials over the past several years which have accelerated post-COVID.
In 2024 globally, more voters than ever in history will head to the polls as at least 64 countries (plus the European Union)—representing a combined population of about 49% of the people in the world—are meant to hold national elections including India and its next door neighbours like Bangladesh, Pakistan, Bhutan, Indonesia, Taiwan and also the USA.
So, what does 2024 hold for the construction sector:
Author: Pratap Padode is Founder & President FIRST Construction Council
Image credit: Freepik
If you were shocked to hear that the 11,000 odd inventory of houses that Maharashtra Housing & Area Development Authority has planned to auction or rent or sell at a discount to release its locked investments after ten years of accumulating, then wait till you hear about what Delhi Development Authority has done to accumulate its unsold stock of 40,000 plus housing units worth Rs 18,000 crore! Delhi Development Authority already had 16,000-plus flats in its old unsold inventory as they were not selling due to an inconvenient location with no Metro connectivity and extremely small sizes. But that did not deter DDA from making another 24,000 units! The value tied up in these 40,000 flats is Rs 18,000 crores or Rs 180 billion. By this estimated value the flats would be in the range if Rs 45 lacs odd or Rs 4.5 million. Our housing shortage is 19 million housing units currently which is expected to double by 2030. At this rate with the Government trying to play 'builder' we will see housing units pile up as unsold inventory and a ballooning deficit in housing units. However, public sector unit NBCC is proving to be an outlier as it recently announced sales of 5,000 units for Rs 2,900 crore thus completing 80% of the inventory across several residential projects of erstwhile Amrapali Group where it was appointed as a project management company under the supervision of the Supreme Court-appointed court receiver. According to NBCC, there were 46,575 apartments across 25 housing projects and out of that 8,416 units were already occupied by home buyers prior to the Supreme Court judgment in July 2019. NBCC got the mandate of completing the remaining 38,159 units and the pending common facilities in those projects where 8,416 units were already delivered with an estimated cost of Rs 8,266 crore. NBCC expects to complete all the projects by March 2025 as per its CMD K P Mahadevaswamy. Meanwhile CIDCO in Maharashtra, has given a final extension to the defaulter applicants of Mass Housing Scheme 2018-19, who have not paid the instalments of the tenement, to pay the entire amount of their respective tenement along with delay payment charges. The last date for making the payment is January 10, 2024. While there are several other schemes rolled out by several states, none can match the Pradhan Mantri Awas Yojana scale and execution. As elections are nearing the execution is turning feverish. In order to achieve the target of “Housing for All” in rural areas, the Ministry of Rural Development is implementing Pradhan Mantri Awaas Yojana- Gramin (PMAY-G) with effect from 1st April, 2016 to provide assistance to eligible rural households with an overall target to construct 2.95 crore pucca houses with basic amenities by 31st March, 2024. Against the mandated target of 2.95 crore houses, more than 2.94 crore houses have already been sanctioned and construction of 2.50 crore houses has also been completed as on 29.11.2023. Under Pradhan Mantri Awaas Yojana - Urban (PMAY-U) which is a demand driven scheme without a target for construction of houses, a total of 118.63 lakh houses have been sanctioned under PMAY-U; of which 78.15 lakh houses have been constructed/delivered as on 20.11.2023. The scheme period which had earlier set a deadline of March 2022 has been extended up to December 2024. Given the actual physical delivery of 2.94 crore rural houses and 1.19 crore urban houses, the infusion of welfare has sown the seeds of demand for cement and other building materials over the past several years which have accelerated post-COVID. In 2024 globally, more voters than ever in history will head to the polls as at least 64 countries (plus the European Union)—representing a combined population of about 49% of the people in the world—are meant to hold national elections including India and its next door neighbours like Bangladesh, Pakistan, Bhutan, Indonesia, Taiwan and also the USA. So, what does 2024 hold for the construction sector: Technology in construction will gather pace Railways projects will supersede Road projects Social welfare infrastructure like hospitals, hotels, schools, institutions will grow Road projects will slow down Metro Rail, High Speed Rail, Logistics and Corridors will define infrastructure Best wishes for a constructive 2024! Author: Pratap Padode is Founder & President FIRST Construction Council Image credit: Freepik
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