The menace of delays is still haunting the realty sector across the country. Implementation of RERA and court decisions against errant builders have set the tone for a more organised sector, but over 4.65 delayed units continue to remain an irritant for homebuyers. This has been revealed in a report released recently by property portal PropEquity.
These projects are on hold for a variety of reasons, including financial constraints, execution challenges, surplus supply due to over ambitious launches by developers, environmental clearances and slow sales, among others.
The total value of projects facing construction delays is estimated to be Rs 3.3 lakh crore or over $47 billion. Interestingly, in the National Capital Region (NCR) over 70 per cent of the projects pending execution are fully sold out but not delivered even after the given deadline. Hence the developers here are under the maximum distress as they face the buyer pressure to complete the sold units.
“Our latest research further reiterates that projects that are completed or nearing completion are attracting maximum buyers as these projects seem to be most risk averse in the eyes of the buyer. However, we also believe that projects by renowned developers, with strong fundamentals would continue to do well irrespective of stage of construction,” Samir Jasuja, Founder and MD of PropEquity.
Thus, as the real estate market gets accustomed to reforms like GST & RERA, absorption for ready-to-move and nearing completion projects will witness a preference. Affordable and mid-income segment is expected to further grow due to favourable government policies. “We also foresee an era of consolidation that will be led by the larger and more capable developers who have the construction and execution capability to meet their commitments”, adds Jasuja. — TNS
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