While the Supreme Court provided relief to 42,000 homebuyers yet to get possession of apartments in Amrapali Group’s residential towers, the problem of stalled real estate projects is much bigger.
As many as 220 projects with 1.74 lakh homes are “completely stalled” in the top seven cities alone—Delhi National Capital Region, Mumbai Metropolitan Area, Bengaluru, Pune, Hyderabad, Chennai and Kolkata, according to Anarock Property Consultants Pvt. Ltd. The overall value of these projects is estimated to be more than Rs 1.77 lakh crore, Anarock said, adding that these were launched either in 2013 or before and the construction work stopped due to liquidity issues or litigation.
Homebuyers are at the mercy of either developers or the law of the land, said Anuj Puri, chairman at Anarock Property Consultants.
“Almost 66 percent of these stalled units (approximately 1.15 lakh homes) have already been sold to buyers who have been left in the lurch,” he said. “The net estimated value of these sold units is approx. Rs 1,111 billion (Rs 1.11 lakh crore).”
Thousands of homebuyers are yet to be handed over apartments by just three large developers: Jaypee Infratech Ltd., Unitech Ltd. and Amrapali Group. That underscores the risk involved in buying a home. The Real Estate Regulation Act, or RERA, has armed homebuyers against potential fraud but doesn’t cover homes already sold.
“With so many projects stuck across the top cities, affected homebuyers now see a glimmer of hope with the Supreme Court’s intervention in the Amrapali case,” Puri said. “Will these hopes be vindicated? The industry stays tuned for further updates on this.”
Here is a city-wise distribution of stalled real estate projects as per Anarock Research:
- NCR has the largest pileup of stalled units with 1.18 lakh homes (68 percent of the total stuck stock) spread over 67 projects with an overall value of Rs 82,200 crore. Of this, nearly 69 percent (or 83,470 units) are already sold out. About 98 percent of the stuck projects in NCR are located in Noida and Greater Noida alone, while other cities like Gurugram, Ghaziabad have minimal inventory.
- Mumbai Metropolitan Region follows next with nearly 38,060 units stalled across the city. However, the number of projects covering stuck units in MMR is higher than in NCR. MMR’s stalled units span over 89 projects as against 67 projects in NCR. Interestingly, in terms of value of the stalled units, MMR is quite close to NCR, with stalled units worth over Rs 80,200 crore as against Rs 82,200 crore in NCR. Despite a huge parity in the overall number of stalled units between the two major regions, astronomical property prices in MMR have kept this difference minimal.
- Pune comes next with nearly 28 projects (comprising 9,650 units) worth Rs 7,000 crore completely stalled.
- Hyderabad has nearly 4,150 units worth Rs 3,600 crore stuck.
- Bengaluru has 26 projects comprising 3,870 stuck units worth Rs 4,200 crore.
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