Builders are facing buyers anger due to delay of 1.5 million houses across 7 major ciities in India

Q: About 1.47 million residential units across 7 major cities in India are delayed by 14-30 months.

Gautam G,

27th January 2016

Real estate News in Mumbai

project delay

real estate

mmr

national capital region

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One trend which I see frequently happening as a result of this is once the project gets delayed, the cost of the project sporadically goes up and more delay adds to the problems of the developers. When banks do not give loan for buying land, the developer resorts to raising the money through private money lenders and private equity. The private money lender then enters the picture offering loan at high interest rate.

Manali Shah,

29th January 2016

Comment

Hello Malini,
Almost 90% under construction projects are delayed. In most of the cases, Delay is intentional. The biggest worry of any buyer in Under Construction Project is delay in Possession of flat. Majority of Real Estate sale in India is through Home Loan. Buyers pay Pre-EMI on amount disbursed for under construction property till they get possession of flat. It upset entire financial calculations of buyer and increase the overall cost of property.

Tushar Sinha, Delhi-NCR

23rd February 2016

Right Tushar,
Have you ever wondered why builders keep launching new project even if previous projects are under construction. Answer is very simple, builder fund next-to-last project from new project to limit his risk completely.

Jashan, Gurgaon

23rd February 2016

Hi Folks,
And it is seen that due to litigation issue, developers have now started changing the completion clause in the buyer’s agreements from 3 yrs to 5 yrs, being more realistic about the timeline of a project. The new completion schedule will take into the account the unforeseen circumstances including delay in government approvals and various litigation issues that come up after launching a project.

Siddharth Rana, Pune

27th January 2016

Comment

Hi Rishi,
Data also indicates that 2567 of the delayed projects are in Mumbai metropolitan region, followed by Pune with 1254 projects, Bengaluru with 1205 projects and National Capital Region with 784 projects. The study covers Pune, Kolkata, Hyderabad, Chennai, Bengaluru, MMR, and NCR. It includes only those projects which were supposed to be ready between 2013 and 2015.

Roshni Pawal, Mumbai

27th January 2016

Comment

It clearly indicates that horrid realty of the real estate sector which has failed to recover from the 2008 financial crisis. Many developers diverted funds raised from one project to another, leading to cash crunch and inventory pile up. No wonder, new launches have come down massively in the residential realty sector.

Praveen P, Delhi

27th January 2016

Hi Praveen,
It is true that lack of regulator in the sector has added to the problems. The government has been talking about regulations for the realty sector since last six years but the Bill for setting up a regulator is yet to be cleared by the Parliament. People are hoping that the Bill will get through in the upcoming Budget session.

Rishi Dev,

27th January 2016

right Rishi,
And recently, we have the seen the result of it. Unitech's top officials had to spent a night in the jail after being taken to courts for delay in delivery. Buyers' are facing project delay, poor construction quality,irregularities in project implementation and non-delivery of project amenities.

Praveen P, Delhi

27th January 2016

IAs you bow so will you reap fits for the developers across India. Most of these projects were launched between 2008 and 2010 and delayed by 15-36 months. Few of them are more than 5 years. It is creating a crisis for not only the homebuyers but also the developers which are facing cash crunch on one hand and litigations on the other.

Roshni Pawal, Mumbai

27th January 2016

Comment

As per the rule, a housing project should be delivered within 36 months, after which a grace period of 6 months is granted. Data, shows that about 7391 residential projects, out of 9591 projects launched between 2008 and 2010, have remained unfinished.

Rishi Dev,

27th January 2016