One fourth of residential projects in India are delayed
Over 25 percent of committed supply in the real estate market in India fails to hit the market as per schedule, reveals a study conducted by a global real estate services company Jones Lang LaSalle. This is one of the major issues prevailing in real estate segment of India, seriously annoying many homebuyers.
Very less projects got delivered on time
Compared to other major cities of India, Delhi-NCR has seen the highest number of project delays in residential segment in the ongoing year. In Gurgaon, only one-third of the total committed supply has been delivered to homebuyers in this year so far, said Santhosh Kumar, CEO of JLL India. The situation is still worse In Noida with only one-fifth of the residential supply being delivered in 2013. Other regions of the National Capital Region have also witnessed a similar trend in terms of project deliveries.
However, Mumbai and Pune have recorded a better trend as the two cities have delivered over 40 percent of the committed supply as per scheduled delivery.
Inventory of unsold units piling up
Owing to prolonged delays in project completion, the inventory level of unsold units has greatly increased. Across India, there is presently an inventory of about 14-15 months. In Mumbai alone, there is an inventory of nearly 48 months, followed by Delhi with 23 months stock and Bangalore with a stock of 25 months. These numbers are close to the numbers recorded in 2007, when the residential property market had recorded an all-time high inventory stock.
Factors responsible for delays
Poor project management and lack of commitment by developers are among the key factors leading to project delays across the nation. Slowdown of economy, liquidity issues, rising costs of construction materials, etc. are some other reasons behind this.
In the recent scenario, it seems that builders are more interested in launching new projects rather than being responsible enough to deliver the projects on time. Funds raised for one project is used to launch another project due to which developers are left with less funds for completing the projects under construction.
Delay in getting all requisite approvals is another valid reason for project delays. In case of several projects in Delhi-NCR, developers failed to face the water and sand crises as well as environmental regulations which left the work incomplete for long. Due to land-acquisition related disputes, many residential projects in Noida suffered delays.
Developers are expected to find better ways to be attractive in the later half of the current fiscal, by which the primary market would continue to appeal the buyers, opined Mr. Kumar. However, buyers should not miss to make a thorough check before investing in a project. They should not merely get carried away by the attractive offers, discounts and freebies offered by developers to accelerate the sales.
