Builders wary of high-rise projects

By Nischith N |NT

Bengaluru: The economic fallout of a Covid-19 induced slowdown had badly affected the real estate sector. In the city, the culture of remote work and the trend of employees moving out of the central business district and IT corridors to the city outskirts have now changed the dynamics of the construction industry.

Bruhat Bengaluru Mahanagara Palike (BBMP) officials claim that there has been a drop in construction companies seeking sanction to build high-rise apartments. It has dropped nearly 40 per cent from pre-Covid times. Builders too are now cautious after incurring huge losses during the pandemic period.

Commenting on the trend, a senior BBMP official from the Town Planning department said, “It is a new trend because of the Covid pandemic, which has hit badly for the construction sector. Also people’s mindset has been changed because of the transport system and last mile connectivity in the city. Most of the residential apartments are empty because people from outskirts like Ramanagara can easily enter the city by using the metro.”

According to the data accessed with News Trail from Additional Director of Town Planning (ADTP) BBMP (North and South), in the year 2018-19 (before Covid) the corporation had sanctioned 167 plans for the high-rise construction across Bengaluru, whereas in 2020-21 the number has fallen to 97.

The number of applications seeking occupancy certificates for commencing the projects has also come down drastically, suggesting that several projects may have been shelved half-way for lack of funds.

“Builders are scared to invest because of the loss caused during the Covid. The current rise in price of all raw materials has increased construction costs. So it is better to manage with low investment for the short term,” said Ramu Prasad, a builder.

Buyers too are cautious as the rise in fuel prices and the cost of construction materials have led to an increase in apartment costs. For instance, if a home buyer has a budget of Rs 50 lakh, he now has to shell out around Rs 60 lakh for the same.

However, the fall has not affected the construction of individual or residential houses or small-scale construction activities.

The BBMP’s building bye-laws 2003 define a high-rise as a building with ground floor plus four or more floors above it, which also translates into above 15 metres in height.