You are here: Home » Economy & Policy » News
Business Standard

Delivery of 1.5 mn houses delayed, builders face buyers' ire

Most of these projects were launched between 2008 and 2010

Mansi Taneja  |  New Delhi 

With a slowdown in real estate, 1.47 mn residential units delayed

About 1.47 million residential units across seven major cities in India are delayed by 14-30 months, 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.

Almost all of these projects were launched between 2008 and 2010, and the residential units were supposed to be delivered between 2013 and 2015. Ideally, a housing project should be delivered within 36 months, after which a grace period of six months is granted.


Data compiled by real estate consultancy PropEquity shows that about 7,391 residential projects, out of 9,591 projects launched between 2008 and 2010, have remained unfinished. As many as 2,567 of the delayed projects are in Mumbai metropolitan region (MMR), followed by Pune with 1,254 projects, Bengaluru with 1,205 projects and National Capital Region (NCR) with 784 projects.

A residential unit could be an apartment, an independent floor or a villa. 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.

The data show the grim reality 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 drastically in the residential realty space.

Of late, homebuyers’ protests have become a common thing thanks to increased consumer awareness and platforms like social media which have made it easier for people to connect and communicate with groups. The 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.

Delivery of 1.5 mn houses delayed, builders face buyers' ire

Buyers’ activism has revolved around delays, poor construction quality, irregularities in project implementation and non-delivery of promised amenities. Recently, Unitech’s top officials had to spent a night in the jail after being taken to courts for delay in delivery.

Due to this, developers have now started changing the completion clause in the buyer’s agreements from three years to five years, being more realistic about the timeline of a project, says a senior executive of real estate firm.

He adds 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.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, January 26 2016. 00:31 IST
RECOMMENDED FOR YOU
.