Real estate projects face delay

Mumbai: Buyers who have booked their houses in an under-construction project have a cause to worry as there will be a delay in possession of their apartments as the realty sector is plagued by acute shortage of labour as well delays in approvals.

This is according to the study conducted by Liases Foras, a real estate research firm which has surveyed more than 2000 projects across the country.

It has concluded that current average possession time in 2025 has now come to 6-7 years from 3-4 years in 2010. This means most of the homebuyers booking flats at the start of the project in 2025 will get their possession by 2031.

Pankaj Kapoor, Founder and Managing Director, Liases Foras, calls the delay as a sign of an inefficient market. “Any delay means increase in project cost and this is bad for the project. There is a danger that such delays may impact the viability of the project. Homebuyers should be very cautious while booking an apartment in such a market,” said Kapoor. Homebuyers should study the track record of the builder as well as the progress of the construction before booking an apartment,” he added.

Large Orders

He said that another factor is that major real estate contractors are overburdened with large scale orders and have exceeded their capacities.

The Builders Association of India (BAI) one of the apex body of the builders has concurred with the study saying that delays are inevitable. “Most of our labour force coming from North Indian states have reduced significantly as they are getting jobs in their home towns itself,” rued Anand Gupta, Chairperson, Housing and RERA committee (BAI).

Labour Force

Another factor pointed by most builders is that illegal Bangladeshi migrants which was one of major labour force is returning back to their native country on account of Special Intensive Revision (SIR) which has aggravated the situation.

With regards to the approval delays, Gupta retorts “This so-called easing of approvals has remained just on paper,” he added. “The problem here we need to take permissions from multiple authorities like state and central government and also BMC. There is no coordination between them which only serves to drag the projects,” he added.

Umang Kuwadia, partner, Happy Homes Group of Companies, a major realty player in central Mumbai said that approval delays are bound to take place in the current scenario. “Seeing the scale of projects, the officials of BMC are burdened with large number of files for approvals. This is bound to cause delays,” said Kuwadia.

Currently Mumbai is the middle of the redevelopment spree with old buildings being torn down to construct new ones. Buyers are being wooed with discounts, staggered payments and various amenities.