Some 33% of the housing projects in Bangalore and Mumbai, and a whopping 66% in National Capital Region will be unable to complete work on time mainly due to a severe fund squeeze, a survey released on Friday showed.
Nearly 45% of the 1,920 projects launched in the three metros suffered due to scarcity of skilled workers and the slothful attitude of the developers, a report by real estate research PropEquity revealed. The study covered projects which were launched between January 2007 and June 2009 and were expected to be delivered by January 2012. While thousands of investors who have booked apartments in these projects continue to pay their loan installments, developers had completed 66% of the projects in Bangalore and 61% in Mumbai. NCR top in realty project delays
New Delhi: NCR reported the worst on-time performance, completing just 23% of the projects developers had taken up. The delay in NCR is visible across Noida and Gurgaon, the two most active hubs, where several apartment owners are awaiting possession.
They complain that the contracts weigh in favour of developers as the delay in delivery only gets them a few thousand rupees as compensation in contrast to two-digit penalty rates levied by realtors.
For instance, for a 2,000 sft apartment that costs around Rs 1crore, a buyer pays around Rs 1 lakh in equated monthly installments (EMI), while any delay fetches a compensation of Rs 20,000 a month.
Typically, developers pay Rs 5-10 per sq ft as penalty.
“NCR has contributed to lot of the delay, and the major reason is that the number of projects that were launched here very large compared to Mumbai and Bangalore. The other reason is that the realty market picked up post subprime crisis and several projects were announced, but the developers did not have the execution bandwidth for it, and in several cases used funds raised from one project to acquire land banks,” said PropEquity CEO Samir Jasuja.
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