Despite promises, realty sector faces supply crunch
The year 2013, is expected to be the year of delivery for residential projects that were stuck for some time. Developers claim that they are going to supply a large number of units this year.
According to a survey done by one of the research firms, in Gurgoan, the projected supply was 38,684 units in 2013 but builders delivered only 360 units in the first two months. In Noida, only 160 units were delivered in January and February, while the target is to supply 49,540 units this year. Mumbai has delivered 1,378 units in the first two months, against a projection of 22,820 for the full year. Chennai looks well set to almost meet the target, as builders here supplied 6,024 units in January and February against a commitment of 51,592 for the full year.
According to a real estate expert, projects of smaller size would see completion, while large township could see delay in possession. Another real estate expert said that it would be difficult for the builders to even delivery half of the committed supply by this year.
Recent research by Jones Lang La Salle India (JLL) shows that more than 63 projects in National Capital region were delayed by four to six year. The delayed projects include DLF (Belaire), Jaypee Group (Jaypee Greens), BPTP and Unitech (Unihomes), amongst others.
JLL spoke of the inventory pile up. In Mumbai, the inventory is about 34 months, Bangalore 23 months, Chennai and Hyderabad at 12-24 months.
Builders are telling that they are not able to handover flats to the home buyers because of several reasons like not getting necessary approvals, land acquisition and farmer issues in the market among others.
For instance, DLF Express Greens, launched in 2009, is also delayed by a year, according to buyers who had booked flats in these projects. But DLF claimed that the work at their project site is going on in full swing and possession would be given by this October.
Unihomes, an affordable housing project by Unitech in Noida, was supposed to be delivered in 2011-2012, possession is yet to be given. The construction work at Unihomes project in Noida were progressing well till affected by the farmers’ demonstrations, dhrnas and agitations. They will start their work in full swing once those issues get resolved.
SVP’s Gulmohar Garden in Raj Nagar Extension (Ghaziabad) has been delayed by more than two years. SVP replied that a builder can develop only internal infrastructure and basic amenities but other requirements like road connectivity, water supply, sewage lines, electricity, wide roads which are not under builders control. Supertech’s EcoVillage project in Noida has been late by over a year.
In Bangalore, Dreamz Infrastructure’s Dreamz Sampoorna and the Paras Group’s Paras Manyata is going to see a delay in possession. In Mumbai, projects that have been significantly delayed (average of 12-24 months) include those of Arihant Associates (Anand Towers) and Gurumauli Developers (SreeOmkar).
In Pune, Paranjape Schemes’ Yuthika and Alcon Builders’ Alcon Silverleaf. In Chennai, Landmark Constructions Orlando and Prince Foundations’ Prince Courtyard are the two projects which are going to face significant delay. The delay is also happening because certain developers took projects beyond their execution capability and in market where they had no presence.
In spite of the delays in ongoing projects, a number of real estate companies are going ahead with new launches to generate cash flow in a tight market situation. Unitech has launched a new project in Noida, SVP in Indirapuram (Ghaziabad), Interestingly, SVP has gone to the extent of launching the second phase of Gulmohar Garden. DLF in Gurgaon, Supertech in Noida and Greater Noida.
