UP may announce package for stressed housing projects as unsold stock soars

Projects in the state have a combined inventory of 100,000 units valued at Rs 1.50 trn, mostly in Noida and Greater Noida

The Uttar Pradesh government is likely to announce a package for reviving the stressed housing projects, 80 per cent of which are concentrated in the National Capital Region (NCR), especially Noida and Greater Noida.

While homebuyers continue to wait endlessly for the delivery of flats, builders claim to be facing a severe cash flow and credit squeeze, with the result that their projects have been lying unfinished for the past several years.

UP chief minister Yogi Adityanath, addressing the 1st National RERA Conclave in Lucknow today, said the state government had constituted a high-level committee headed by the chief secretary with a mandate to submit its report within a week after studying the recommendations of two committees, one each set up by the Centre and state respectively on the beleaguered housing sector.

“The state government will take into account all issues such as zero period, co-developer, part finished projects and floor area ratio (FAR) to come out with a positive solution to both the home buyers and the builders,” he announced.

Currently, UP has more than 100,000 unsold housing units, worth about Rs 1.50 trillion, most of which are in Noida and Greater Noida.

Adityanath observed that the domestic real estate sector, which had earned a bad reputation, was now yearning for a new identify, which the Narendra Modi government had sought to address by instituting RERA (The Real Estate (Regulation and Development) Act, 2016. The Act seeks to protect homebuyers, boost the real estate industry and usher in transparency in property transactions.

The Conclave ‘Transforming Realty with RERA’, organised by UP RERA, saw the participation of authorities from other states, government officials, representatives of central and state agencies, homebuyers, developers, real estate agents, consultants, CREDAI, and National Real Estate Development Council (NAREDCO).

Union Minister of State for Housing and Urban Affairs, Hardeep Singh Puri, was the chief guest. The event was organised in the backdrop of the real estate sector facing challenges of cash flow and credit, lack of demand and probes by investigation agencies. The deliberations are expected to help all stakeholders find common ground for the development of the sector.

Meanwhile, NAREDCO vice chairman Praveen Jain told Business Standard that since UP accounted for the maximum number of unfinished housing units, the state government ought to take proactive steps to help the sector and boost sentiment.

“The need of hour is to give more teeth to RERA and possibly empower it to take over housing projects with the government standing as guarantor. This would inspire confidence in private investors to collaborate for unfinished projects, and the situation would ease in the next 2-3 years,” he claimed.

Jain noted if the housing sector could emerge out of the crisis, the current economic slowdown would automatically evaporate and the economy would come back on track. “We have to collectively make an effort to revive the real estate sector.”