Ghaziabad and Gurgaon, the satellite towns in the National Capital Region (NCR), led in terms of the highest proportion of property projects delayed in the country, which were scheduled for completion in 2008 and onwards, a new study has found.
Both these suburbs have 71 per cent of projects delayed, as against the total number of projects scheduled for completion in 2008 and onwards, a study by real estate research firm PropEquity said.
Ghaziabad had 84 projects delayed out of 118 and Gurgaon had 78 of 110. In absolute terms, Bangalore, the country’s IT hub, witnessed the highest number of delays among projects scheduled for completion in 2008 and onwards, while Pune came second.
In Bangalore, 309 of the 575 projects were delayed and the average delay in these projects was nine months. In Pune, 305 of 665 projects were delayed, with an average of eight months. Mumbai came third, with 233 of 501 projects, with an average delay of nine months, the study said.
“A lot of developers were diverting funds meant for a project to other projects, hence cash flow was an issue. Their order book was more than what they could actually execute. Many smaller developers jumped into the property sector and they could not complete the projects, resulting in delays,” said Samir Jasuja, founder and chief executive of PropEquity.
In terms of unsold properties in the 10 cities, Pune, Mumbai and Hyderabad came first, second and third, respectively. Pune, Mumbai and Hyderabad had 36,435 units, 32,120 and 31,536 units unsold in June 2009. In terms of regions, the East had 5 per cent of properties unsold between January to June 2009, and the North, West and South had 23 per cent, 40 per cent and 31 per cent of properties unsold respectively in the period, the study found.
Thane, Mumbai and Gurgaon ranked first, second and third, respectively, in terms of percentage price drop in apartments in the country, as economic downturn and dwindling incomes of home buyers impacted property sales and led to a drop in prices. Between May of 2008 and 2009, Thane (a far eastern suburb of Mumbai), Mumbai and Gurgaon witnessed a drop of 22 per cent, 20 per cent and 19 per cent, respectively.
But in terms of absorption of projects during January-June 2009, Mumbai came the highest with 17,689 units, while Pune and Noida came second and third with 13,899 and 6,808, respectively.
“These cities had a lot of new launches and witnessed high absorption. Mumbai is driven by end-users, while Pune had a mix of end-users and investors,” said Jasuja.
Jasuja feels absorption will improve and unsold portions come down as developers increasingly launch affordable projects. “Delays will continue, as execution is becoming a challenge for developers who are finding it difficult to arrange finances,” he said.