Expressing concern over the plight of customers whose investments are at stake, the Forum for People’s Collective Efforts (FPCE), an umbrella body of homebuyers, President Abhay Upadhyay told PTI that the cause of the delay in each project should be determined and solutions must be found.
He also called for tough action against failing builders.
According to data from Anarock, 4,79,940 units worth Rs 4,48,129 crore are “stuck or heavily delayed” in these seven cities as of May 31, 2020.
Of this total, Delhi-NCR alone accounts for 50% with 2,40,610 units blocked or delayed worth Rs 1,81,410 crore.
Giving a further breakdown of the Delhi-NCR data, Anarock said Noida and Greater Noida region accounts for almost 70% of the total blocked/delayed units, while Gurugram’s share is only 13%.
In Noida and Greater Noida, there are 1,65,348 units worth Rs 1,18,578 crore units stuck or delayed.
While Gurugram has 30,733 units worth Rs 44,455 crore blocked/delayed, Ghaziabad market has 22,128 such units worth Rs 9,254 crore.
Delhi, Faridabad, Dharuhera and Bhiwadi together have 22,401 blocked/delayed units worth Rs 9,124 crore.
“Project delays have been the bane of India’s real estate sector over the past decade, especially in the NCR. Even the implementation of RERA (Real Estate Act) has had little impact on this” , said Prashant Thakur, Senior Director and Head of Research at Anarock. PTI.
Among other factors, he said the cash crisis has created obstacles for many developers in the NCR.
The government’s Rs 25,000 crore stress fund, which was launched in 2019 and called SWAMIH, has proven effective in reviving many stalled projects, he added.
“Needless to say, real estate activity in Greater Noida has boomed before on the pretext of enhanced connectivity with the Yamuna highway that runs through this region. Builders have taken advantage of connectivity prospects and launched countless projects over the years. Builders have also started projects in Greater Noida West which are now stuck in various stages of non-completion,” Thakur said.
Anarock did not mention the names of the developers as well as the blocked or significantly delayed projects, but
Amrapali and The 3C Company are some of the big companies whose projects are stalled in Delhi-NCR.
Many other builders have defaulted on their promises to deliver their projects on time to customers, who have already paid almost the full purchase price.
Not only that, they are also paying interest on home loans with no sign of a quick resolution.
Against defaulting builders, homebuyers have gone to various courts as well as the National Company Law Tribunal (NCLT) to secure their investments.
(JIL) entered the Corporate Insolvency Resolution Process (CIRP) in August 2017.
After several tenders, the Mumbai-based Suraksha Group received approval from financial creditors and homebuyers in June last year to take over the JIL, raising the hopes of more than 20,000 buyers to take possession of the apartment of their dreams.
The Suraksha Group has not yet obtained approval of its resolution plan by the NCLT.
In the case of Unitech, the Supreme Court in January 2020 authorized the Center to take full management control of Unitech, once the second largest real estate company in the country, and appoint a new appointed board of directors.
Yudvir Singh Malik was appointed as the new CMD after the central government replaced Unitech’s board.
The move was intended to bring relief to more than 12,000 harassed Unitech homebuyers, but customers are still waiting for possession of the apartments.
In Amrapali, the state company
undertook the completion of numerous residential projects in Noida and Greater Noida under the aegis of the Amrapali Stalled Projects and Investment Reconstruction Establishment (ASPIRE) and the supervision of the Supreme Court.
Around 40,000 homebuyers are stuck in various Amrapali Group projects.
“There are still a large number of delayed projects from the pre-RERA era that are incomplete. These projects need to be properly identified and the cause of the delay determined,” FPCE’s Upadhyay told PTI.
If the main reason is the lack of funds due to embezzlement, then he said the promoters of such projects must be dealt with harshly, including the recovery of funds from his personal assets.
“However, if there are other administrative or regulatory reasons, the respective authorities should try to resolve the issues on a case-by-case basis,” Upadhyay said.
The FPCE president said RERA authorities should take the initiative to ensure that the delayed projects are completed at the earliest.
After the Delhi-NCR market, MMR has the second highest number of blocked or delayed units. The southern cities of Bengaluru, Chennai and Hyderabad have only 9%.
Pune holds around 9% of the shares, while Kolkata accounts for 5%.
There are 1,28,870 units worth Rs 1,84,226 crore in the MMR which are blocked/delayed. Bengaluru has 26,030 blocked/delayed units worth Rs 28,072 crore.
Hyderabad has 11,450 blocked/delayed units worth Rs 11,310 crore.
In Chennai, 5,190 units worth Rs 3,731 crore are currently stuck or significantly delayed. Pune has 44,250 units worth around Rs 27,533 crore that are stuck/delayed, while Kolkata has 23,540 such units worth Rs 11,847 crore.
Anarock is mainly in housing brokerage and sells apartments on behalf of developers. It achieved a 32% growth in revenue to Rs 402 crore in the last financial year.