 "Housing crisis: Nearly 2,000 projects stalled in India; Mumbai tops list")
One in five under-construction homes across the country have been stalled over the past eight years, affecting over five lakh housing units, reveals a recent report by real estate data analytics firm PropEquity.
Even the remaining four out of five under-constructed homes have been delivered after substantial delay of 3-4 years, the report said.
The city-wise data released on August 15 reveals that 1,981 projects across 44 cities have been on a standstill over the past eight years, impacting homebuyers and real estate developers alike. By July 2024, the number of stalled units reached 508,202, marking a 9 per cent increase from 2018 when the figure was 465,555.
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Breaking down the figures, the report indicates that 1,636 projects totaling 4,31,946 units in 14 Tier-I cities and 345 projects totalling 76,256 units in 28 Tier-II cities have been affected. Greater Noida in the National Capital Region tops the list among Tier-I cities with 74,645 stalled units across 167 projects. It alone accounts for 17 per cent of all stalled units in Tier-I cities in India.
Meanwhile, Mumbai has the highest number of stalled projects at 234. Bengaluru follows with 225 stalled projects. In Tier-II cities, Bhiwadi leads with 13,393 stalled units across 33 projects. This represents 18 per cent of all stalled units in this category.
Stalled projects and units in Tier-I cities
Stalled projects and units in Tier-II cities
“The problem of stalled projects and the subsequent rise is due to the lack of execution capabilities of developers, cash flow mismanagement and diversion of funds to buy new land banks or retire other loans,” said Samir Jasuja, Founder and CEO of PropEquity.
He said the need of the hour is an independent third-party audit service for homebuyers to empower them to make an informed decision about the developers’ capabilities to complete the project on time.
Addressing the roadblocks
To address the issue of stalled projects, the government launched the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund in November 2019. To date, the SWAMIH Fund has raised Rs 15,530 crores to complete stalled projects. Yet, only about 32,000 units have been completed in the past five years.
The Fund reportedly aims to deliver 20,000 homes annually for the next three years. But this target seems ambitious, given the current completion rate. “This situation has led to an increase in real estate disputes in various courts, putting additional pressure on homebuyers to conduct thorough due diligence before purchasing property,” Jasuja said. As the real estate sector grapples with cash flow and delivery challenges, the impact on homebuyers remains a concern.