In what appears to be a rude wake-up call for the real estate industry, it is revealed that units worth USD 45 billion are facing endless delays. As per a recent report, over 1868 projects amounting to 4.65 lakh units are facing significant execution delays across major Indian cities.
The major reasons for the delay of such a whopping number of projects remain sales slow down, cash crunch facing developers and issues related to project approvals. The current value of the delayed units is Rs 3.32 trillion (over $47 billion), as per the recent report by Prop Equity.
“The delays in these projects range from 2-8 years and there is no certainty when these would be completed,” Business Standard quoted PropEquity Founder and MD Samir Jasuja as saying.
It is a no hidden secret that the Indian real estate sector, especially housing segment, is facing a multi-year slowdown that has led to significant delays in the execution of projects. Protests march and court appeals by the hassled home buyers to seek some relief are seen every day.
Post RERA and GST, the Indian real estate sector has shown just a minor improvement in selected micro markets. However, the fact remains that over 465,000 housing units are delayed significantly behind their delivery deadlines with daunting construction delays.
Out of total delayed units, nearly 180,000 units valued at Rs 1.22 trillion are facing an uncertain future in the NCR region (Gurgaon, Noida, Greater Noida, Ghaziabad, Faridabad). Mumbai is not very far behind with 105,000 units worth Rs 1.12 trillion are pending completion in MMR which includes Mumbai, Navi Mumbai, and Thane.
In Bengaluru, about 38,242 units, worth Rs. 264 billion, still need to be handed over to buyers. In other Tier-2 cities, as many as 303 projects having 68,094 units, worth Rs 301.20 billion, are yet to be delivered.