New Delhi, November 22: Over half the housing projects that have been delayed by over five years that are likely to reach completion post-2020 are in the Mumbai Metropolitan Region (MMR), according to a report by PropTiger. These projects are also likely to benefit the most from the Rs 25,000 crore Alternate Investment Fund (AIF) announced by the government. This is because they are more likely to meet the networth-positive and litigation-free conditions set under the AIF.
According to the report that included analysis of 10 prime residential markets of the country, around 1,665 RERA-registered housing projects are delayed by over five years across India and are likely to see completion only after 2020.
Of these, 880 projects constituting of over two lakh units are concentrated in the MMR market, counted as the most expensive property market in India. Hyderabad and Pune follow MMR where 276 and 241 housing projects have been delayed for over five years. A total of 125 projects are delayed across Noida, Greater Noida, and Gurgaon, consisting of over one lakh housing units, the report said.
In terms of units, Hyderabad has one of the lowest scores, at 15,138 delayed homes, in the list of 10 cities. In Pune, over 47,000 housing units delayed for more than half a decade that would reach completion post-2020, data shows.
Mani Rangarajan, Group COO, Elara Technologies, said that liquidity issues could be cited as the single biggest reason behind project delays, a phenomenon that has had an absolutely negative impact on buyer sentiment. “The Rs 25,000-crore lifeline extended by the government in the form of an AIF would change much of that,” he said.
Rangarajan added that housing projects in the MMR are more likely to meet the net-worth-positive and litigation-free conditions set under the AIF, which would mean a large part of the fund could be spent on completing projects in the Mumbai market.
Chennai has the lowest number of delayed projects (24) as well as units (11,679), primarily because the size of housing projects in this property market is comparatively smaller. Typically, builders launch housing projects with 50 units or less in Chennai which could be completed in a shorter time span. The chances of cost overruns in such projects are also low.
The markets covered in the analysis are Ahmedabad, Bengaluru, Chennai, Gurugram, Hyderabad, Kolkata, Mumbai, Noida-Greater Noida and Pune.
While the analysis does not point out the specific reason behind the delay in these projects, majority of the projects have been stuck owing to liquidity crunch, delays in approvals, a periodic ban on construction activities and litigation.