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1.77 lakh cr worth housing projects stalled in 7 cities

August 13, 2019 06:15 AM

COURTESY TIMES OF INDIA AUG 13

1.77 lakh cr worth housing projects stalled in 7 cities
Around 10K Units Launched In 2013 Or Earlier Pending In Chennai
Jayaraj.Sivan@timesgroup.com

Chennai

: More than 1.74 lakh homes worth ₹1.77 lakh crore in 220 projects, launched before 2014 across the top seven cities in India are stalled with zero construction activity, says a report by realty firm Anarock. Almost 66% of the stalled units, numbering about 1.15 lakh units, have already been sold. The net estimated value of these units is ₹1.11 lakh crore, the report added.


The number is still higher at 5.76 lakh units worth ₹4.64 lakh crore, if one were to include “delayed and heavily delayed” projects launched before 2014 as well, the report said.

Interestingly, Chennai has very few stalled units, with less than 100 apartments. “The meagre number of stalled units in Chennai is a strong testimony to the city’s fabled conservativeness and end-user-focus in real estate development,” said Anarock Property Consultants chairman Anuj Puri. However, like most other cities, Chennai, too, has a sizeable number of delayed projects. Around 10,000 housing units worth ₹6,500 crore, launched in 2013 or before, are pending completion in Chennai, as per the report. Among the seven major cities — National Capital Region (NCR), Mumbai Municipal Region (MMR), Bengaluru, Chennai, Hyderabad, Pune and Kolkata — only Hyderabad has lesser number of delayed projects than Chennai. But with Hyderabad has 4,150 stalled projects, even Hyderabad is denied the status of a safe haven for home buyers.

The NCR, which is home to many stuck projects like Amrapali, tops the list with close to 1.2 lakh stalled housing units, followed by MMR (38,060) and Pune (9,650) units. Most projects are grounded either due to liquidity crisis or litigation. The NCR and MMR lead the way in delayed projects too, with each of the two cities accounting for more than 2 lakh units. Pune, with 95,000 units, has the third highest number of delayed projects.

Liquidity crisis, especially for NBFCs, has a direct link to hurdles faced by developers in completing projects. “The NBFC crisis in late 2018 hit the already-ailing realty sector hard and brought to a screeching halt once more whatever optimism and growth the residential segment was beginning to see,” said Puri, adding that despite some developers having necessary approvals as well as the will to complete them, lack of funds held the entire situation hostage.

The country’s realty sector has a lot to worry about and hope for. The freedom to buy homes has turned into shackles for many on account of projects getting stalled, said the report. Amidst all the negatives, the distinct identity and incentives extended to the affordable housing segment should help revive the sector, Puri felt. Rental housing got its first tangible push when the country brought out a Draft Model Tenancy Act this year. It would go a long way in defining both parties’ rights and obligations, the chairman said

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