One of the biggest issues that homebuyers face across the country is inordinate delays in project completion. The worst sufferers, however, are homebuyers from the National Capital Region (NCR) and the Mumbai Metropolitan Region (MMR). The average project completion time is the highest in these cities compared to others, according to a report from Anarock Research. Around 2.3 million units have been launched between 2013 and September 2020 across the top seven cities—Bengaluru, Chennai, Pune, Kolkata, NCR, MMR, Pune—and out of these, around 34% (approximately 792,000 units) have been completed so far, said the report.
NCR and MMR saw the lowest number of project completion, as only 26% and 28% of the projects launched in these cities since 2013, respectively, have been completed so far.
In fact the average time taken by the developers in these cities to complete the project was higher than in other cities. The average time taken across seven cities to complete a project was 5.1 years for a project with less than 500 units and 6.6 years for a project with more than 500 units.
On the other hand, the average time taken to complete a residential project in NCR was six years for a project with units between 100 to 500, and seven years in case of projects with more than 500 housing units.
In MMR, the average time taken to complete a project with less than 500 units was 5.4 years, and for a project with more than 500 housing units, the time taken was 6.5 years.
Chennai developers have shown the best performance. As per the data, the average time taken to complete a project was 4.1 years and 5.5 years, respectively, for projects with less than 500 and more than 500 units.
“NCR and MMR have largely been investor-driven markets over the past years. As a result, many developers were in the past more focused on unleashing inventory than on completing ongoing projects,” said Anuj Puri, chairman, Anarock Property Consultants Pvt. Ltd.
Not surprisingly, the number of launches was the highest in NCR and MMR. In NCR, a total 554,000 units were launched since 2013, while in MMR 626,000 units.
Sameer Jasuja, CEO, PE Analytics, said developers in the two markets overextended themselves and launched too many projects, though they lacked execution capabilities. “Also, these markets were mostly driven by investors who stopped paying due to project delays, which further led to developers facing a cash crunch. This further delayed the project completion,” added Jasuja.
Another reason for the delay in project completion is the launch of higher number of larger projects (with more than 500 units) in these two markets. “MMR and NCR have seen a high number of large-sized projects (>500 units each) over the last seven years, in comparison to the southern cities. If we look at project launches between 2013 and 2019, as many as 313 projects in MMR were large, while in NCR, we saw 390 large projects. In contrast, all three southern cities saw just 283 large-sized projects launched during this period,” said Puri.
Experts believe that despite the implementation of the Real Estate (Regulation and Development) Act, 2016, the struggle to complete these projects will continue.
“Although RERA requires the projects to be completed within a particular timeline but funds are needed for completion which they are struggling for now,” said Jasuja.
The stress on the developers has heightened after covid-19 set in, so if you are planning to buy a house in the near future, it will be better to go for a ready-to-move-in property. “In case one is looking for an under-construction property, it is better to go for reputed developers with a track record,” added Jasuja.