45 Percent Housing Projects in NCR, Mumbai Facing Delays

New Delhi: A large number of housing projects being developed in the national capital region, Mumbai and Bangalore are facing significant delays due to the paucity of funds and lack of demand, according to property research firm PropEquity. The study, which surveyed 1,920 projects launched during January 2007-June 2009 in these three regions, with expected delivery by January 2012, shows that "massive 45 per cent of all projects surveyed are still under construction and are facing significant execution delays" PropEquity pointed out that NCR was the worst performer of the three regions with just 23 per cent of the projects completed by January. "Several developers launched slew of projects pre-2008 crisis and are now facing severe funding glut, increased borrowing costs, falling global macro-economic trends and dwindling housing demand," it observed. Of total housing projects being developed in Bangalore and Mumbai, PropEquity said that 66 per cent and 61 per cent were completed, respectively. In a statement, PropEquity Chief Executive Officer Samir Jasuja said: "NCR has contributed to lot of that delay, and the major reason is that the number of projects that were launched here very large compared to Mumbai and Bangalore metropolitan regions." The developers did not have that execution bandwidth to complete so many large sized projects and that led to delays, he added. Within NCR, affordable housing faced the major brunt, as 92 per cent of all projects were delayed, followed by 76 per cent in the mid-end housing projects and luxury housing - 72 per cent, the report found. Last year, farmers' protest on land acquisitions prompted the Supreme Court to cancel the construction of residential flats in Noida Extension, which tanked absorption, prices and supply, it pointed out. Of the delayed projects in the three regions, 40 per cent may be delivered by end of 2012. About 12 per cent of the delayed projects are expected to be delivered by 2014 end as they are most likely at the excavation stage. The latest report also showed that small-sized projects (under 300 units) saw 62 per cent completion rates compared to just 23 per cent completion rate for large sized projects (above 300 units).