Around 5.76 lakh housing units worth Rs 4.64 lakh crore are facing construction delays in seven major cities across the country for a variety of reasons.
Around 5.76 lakh housing units worth Rs 4.64 lakh crore are facing construction delays in seven major cities across the country for a variety of reasons that include financial constraints, dodgy activities of some developers, execution challenges, surplus supply and despite the implementation of the Real Estate (Regulation and Development) Act, according to a report by property consultant ANAROCK.
Mumbai Metropolitan Region (MMR) and National Capital Region (NCR) are the two major regions where maximum units with significantly high values have been delayed since their launch in 2013 or before. As many as 4,10,000 units, worth Rs 3.6 lakh crore, across these two regions are grappling with some deployment issue or the other over the years, resulting in delayed possession. While MMR has 2,10,000 units worth Rs 2,34,000 crore that are stuck, the NCR has 2,00,000 units worth Rs 1,26,000 crore that are pending.
ANAROCK’s numbers are higher than PropEquity’s, which said that nearly 4.65 lakh units worth nearly Rs 3.33 lakh crore were behind delivery schedule.
“Developers themselves have been forced to cut down on new launches and are instead focusing on execution. The problem of delayed projects is massive and worrisome,” said Samir Jasuja, Founder and MD of PropEquity.
ANAROCK chairman Anuj Puri said the government has, over the last few years, taken measures to bring in greater transparency and efficiency in this sector. “However, despite the implementation of game-changing policies like Rera and GST, the issue of stalled or delayed projects that has primarily been at the core of buyers’ discontent is yet to be addressed satisfactorily,” Puri said.
The most profound impact of the housing delay is obviously on buyers who have already invested in these projects, affecting their overall financial planning, increasing the burden of rent along with equated monthly installments (EMIs), he said.
Though Rera has provisions to ensure timely delivery of projects, but this law has been diluted in many states.
“To this extent, Rera may be effective in freeing only a limited amount of the stuck inventory. In short, despite Rera, buyers are still at the mercy of the developer’s actual intent to deliver in many cases,” Puri said.
Abhay Upadhyay, president of pan-India home buyer’s body of Forum For People’s Collective Efforts and home buyers group Fight For Rera, said that the performance of Rera with regard to registration of projects is satisfactory, but the implementation of other provisions of the Act is cause of concern. “A fully informative web portal, 70% deposit in separate account for both ongoing and new projects, deposit of 100% of amount payable to allottee and a minimum of 30% penalty to be deposited by builder before opting for appeal against the order of regulatory authorities are not being implemented properly and the execution of orders is also not up to expectations which is denying full benefits of Rera to home buyers,” Upadhyay said.
Meanwhile, industry experts strongly disagree with the figures of delayed projects. According to industry bodies, there has been robust demand for ready-to-move-in projects and new launches in the last two quarters.