HomePress ReleaseThe Times of India: Mumbai, NCR have most delayed realty projects.

The Times of India: Mumbai, NCR have most delayed realty projects.

CHENNAI: Delayed projects have plunged the real estate industry into a lull with the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) together accounting for stalled housing projects worth Rs 3.6 lakh crore, more than 78% of the total delayed projects in the country in terms of value, according to a report released by realty consultant Anarock ..

In all, close to 5.76 lakh housing units worth Rs 4.64 lakh crore started in or before 2013 are yet to be completed in seven major cities. Hyderabad has the least project delays, with 8,900 units worth Rs 5,500 crore running behind schedule. All other cities account for more than 10,000 residential units per city. In Chennai, 10,000 housing units worth Rs 6,500 crore are are stalled, said Anuj Puri, chairman, Anarock Property Consultants.

There isn’t much difference between the Mumbai region and the NCR in terms of the number of delayed housing units. As against 2.1 lakh units in MMR, there are two lakh units that are delayed in the NCR. However, going by their value, MMR far exceeds the national capital.

Project delays, dodgy activities of some developers and land litigation issues have dented the domestic and international image of the Indian real estate sector, said Puri.

Non-completion of projects is the primary source of discontent among homebuyers. It is double whammy for end users as they have to pay the equated monthly instalment  for the unfinished apartment as well as the rent for the flat they currently occupy.

Prolonged liquidity crunch is a major factor delaying projects. Factors such as delayed environmental clearance, land disputes and non-Rera (Real Estate Regulation Act) compliance in some states add to the problem.

Of late, shortage of skilled manpower is also a concern. By 2022, it is estimated that the real estate and construction industry will require more than 66 million people while the shortage of workforce is pegged at nearly 2-3 million.

Delay in completion of projects also leads to shooting overheads, rendering the project unviable. “Stringent penalty clauses under Rera, , increasing awareness among homebuyers, and a pro-customer judiciary have forced real estate firms to focus on timely project delivery and be accountable for the promises made,” said Puri.

However, some states have put homebuyers in trouble through skewed Rera norms.

For instance, in Karnataka, old projects that are complete 60% or more are exempted from Rera’s purview. As most projects get delayed in their final stages, regulations such as those in Karnataka leave buyers at the mercy of developers.