Funds crunch to delay home deliveries
According to research firm Liases Foras, the construction of nearly half of the 3,23,000 homes scheduled to be delivered in 2013 are lagging behind. At least a third of these will not be ready even before 2014.
A survey by the company has revealed that three of every four homes to be delivered in 2014 will be delayed. The delay in delivery is assumed to be an effect of lack of fund flows to the realty sector. This fund crunch scenario started since the economy slowdown in 2010.
Approximately around 74 percent of deliveries by builders in the National Capital Region (NCR) are delayed. The estimated delivery delay rate is 61% in Mumbai and Chennai, 59% in Bangalore and 57% in Kolkata.
The project completion delays not only harm home-buyers but also the economy, alleged DK Mittal, secretary, department of financial services. It is expected to further increase the pain in realty sector.
Other sources of funding including private equity firms and banks are also shrinking out. Slow home-sales is also tightening up the liquidity rate. Adding to these worries is litigations by buyers, approval delays and labour shortage.
Approval, Bangalore, Buyers, Chennai, Construction, delay, Economy, equity firms, financial services, fund flows, Kolkata, labour, Liases Foras, liquidity, litigations, Mumbai, NCR, Private Equity, Realty sector, Slowdown, Survey
