Real estate sector, which is estimated to incur a loss of over Rs 1 lakh crore due to nationwide lockdown, is likely to see pay cuts and job losses as cash-strapped builders will look to reduce their fixed cost at a time when their sales revenue has almost come to a grinding halt, according to industry players.
However, property developers and consultants believe that damage could be minimised if the government announces a big relief package for the industry as well as the overall economy.
"Real sector is the second-largest employer after agriculture and provides for both blue and white collar jobs. Construction and other allied workers comprise a very important segment of the Realty Sector. There might be job losses and pay cuts," CREDAI (National) Chairman Jaxay Shah said.
As of now, he said, the priority is to provide labourers with basic amenities.
"It's too soon to say anything on pay cuts as this will totally depend on how long the pandemic continues," Shah said.
NAREDCO President Niranjan Hiranandani said: "There will be an obvious impact on sales, and that in turn will impact profitability of business organizations. So, a pay cut might be the first reaction across business organizations, some jobs being lost might be the second."
However, he said if the government soon announces a stimulus package, "Things may not end up being so bad, in terms of companies going bankrupt or jobs being lost."
Puravankara Ltd MD Ashish Puravankara said, "While the listed players, like us, who are geographically de-risked and have diverse business portfolio, will be able to plan and organise the next steps; the current impasse may pose a problem in the long term for a few companies who might have to take some austerity measures in the shape of job losses or pay cuts."
Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa, CBRE, said: The Covid-19 situation is still evolving in India and it is too soon to comment on the impact it will have on the industry."
Nayan Raheja, Executive Director, Raheja Developers said: "We are waiting and watching on the current situation and how long the lockdown continues to take any definitive call on this matter. However, at the moment all labour and staff are being supported."
Ashok Gupta, CMD, Ajnara India, said, "These are tough times, but we are standing strongly with our employees amid this crisis."
NCR-based KW group Director Pankaj Jain said: "As of now we are not deducting salaries of our employees. In the current situation, we all need to support each other. Companies must show more empathy towards their staff."