Rs 4,517.50 billion worth of housing stuck in stages of non-completion
Real Estate

Rs 4,517.50 billion worth of housing stuck in stages of non-completion

Despite the establishment of a regulatory mechanism, countless homebuyers have been left in the lurch by their builders. In fact, Rs 4,517.50 billion worth of housing is currently stuck in various stages of non-completion across top seven cities, according to data from real-estate services company ANAROCK.

Most of these projects do not fall within the ambit of RERA as they were launched years before it was implemented. Also, with many states having diluted the Centre's original RERA rules, homebuyers have only the courts to approach, which is a notoriously tedious task in India.
  
Areas like the National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) collectively account for 72 per cent of the total stuck housing units across the top seven cities worth Rs 3490.1 billion—nearly 77 per cent of the total worth of the stuck projects. In comparison, the main southern cities of Bengaluru, Chennai and Hyderabad together account for a mere 10 per cent of the overall stuck housing units with a total worth of Rs 417.7 billion. Bengaluru has less than half the total delayed stock in Pune (86,700 units), while Chennai has the least project delays during this period, with around 8,650 units worth Rs 56.20 billion.
 
“Besides the lack of will of some developers to complete their projects and preference for funds diversion, the tightening credit crunch has been a major factor contributing to this mounting problem,” observes Anuj Puri, Chairman, ANAROCK Property Consultants. “Also, every delayed project results in cost overruns, which compound the funding crunch even further. Lack of project clearances, for whatever reason, also contributes to the piling up of housing stock. In the pre-RERA era, many builders launched greenfield projects without requisite approvals in place, resulting in their projects getting stuck.” 
 
As one of the possible solutions to this problem, the government-owned NBCC has been roped in to complete some stalled projects in NCR. This is a significant move that, if applied in larger numbers, can have a real impact. “Moreover, even if NBCC picks up 50 per cent of overall stalled projects, the resultant construction activities would create significant employment for the EWS and LIG segments, which are also the key target segment for affordable housing,” he adds.
 
Additionally, with NBCC undertaking construction, the apprehensions of banks about funding construction would ease. With this provision, even when builders opt for bankruptcy, state authorities would intervene to safeguard the investments of homebuyers. However, buyers are still awaiting their final outcome of these interventions.

Despite the establishment of a regulatory mechanism, countless homebuyers have been left in the lurch by their builders. In fact, Rs 4,517.50 billion worth of housing is currently stuck in various stages of non-completion across top seven cities, according to data from real-estate services company ANAROCK.Most of these projects do not fall within the ambit of RERA as they were launched years before it was implemented. Also, with many states having diluted the Centre's original RERA rules, homebuyers have only the courts to approach, which is a notoriously tedious task in India.  Areas like the National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) collectively account for 72 per cent of the total stuck housing units across the top seven cities worth Rs 3490.1 billion—nearly 77 per cent of the total worth of the stuck projects. In comparison, the main southern cities of Bengaluru, Chennai and Hyderabad together account for a mere 10 per cent of the overall stuck housing units with a total worth of Rs 417.7 billion. Bengaluru has less than half the total delayed stock in Pune (86,700 units), while Chennai has the least project delays during this period, with around 8,650 units worth Rs 56.20 billion. “Besides the lack of will of some developers to complete their projects and preference for funds diversion, the tightening credit crunch has been a major factor contributing to this mounting problem,” observes Anuj Puri, Chairman, ANAROCK Property Consultants. “Also, every delayed project results in cost overruns, which compound the funding crunch even further. Lack of project clearances, for whatever reason, also contributes to the piling up of housing stock. In the pre-RERA era, many builders launched greenfield projects without requisite approvals in place, resulting in their projects getting stuck.”  As one of the possible solutions to this problem, the government-owned NBCC has been roped in to complete some stalled projects in NCR. This is a significant move that, if applied in larger numbers, can have a real impact. “Moreover, even if NBCC picks up 50 per cent of overall stalled projects, the resultant construction activities would create significant employment for the EWS and LIG segments, which are also the key target segment for affordable housing,” he adds. Additionally, with NBCC undertaking construction, the apprehensions of banks about funding construction would ease. With this provision, even when builders opt for bankruptcy, state authorities would intervene to safeguard the investments of homebuyers. However, buyers are still awaiting their final outcome of these interventions.

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