No buyers for property, flat possession to be delayed
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Lack of sales in the property market is now taking a toll on delivery of residential projects. The latest data shows that buyers in almost 65% of the projects launched over the last three years will have to now deal with delayed delivery of their homes.
According to data collated by real estate research agency Liases Foras, 65 per cent of the 4,091 projects that were launched over the last three years in the Mumbai Metropolitan Region (MMR) have been deferred. The delay ranges from six months to over three years.
Pankaj Kapoor, CEO of Liases Foras, said the primary reasons for deferred possession dates are slow sales, a direct fallout of the overheated housing prices in Mumbai. "When the sales are down, developers do not have the requisite cash flow to meet the construction costs. As a result, in many cases they deliberately delay their construction pace as they do not want to put in more of their own equity in the project," said Kapoor.
Projects by major developers where the date of possession has been deferred by two years or more include DB's Orchid Ozone at Dahisar and Orchid Woods at Goregaon, Kalpataru Riverside at Panvel, Lodha's Casa Univis at Thane and Aqua at Mira Road, Indiabulls' Green at Panvel and Sky Suites at Lower Parel and Orbit Residency at Andheri to name a few.
Kapoor said while several projects within Mumbai have suffered, the effect is most visible in projects on the outskirts, which have a strong investor presence. These are peripheral areas that are not presently habitable and hence are initially sold to investors based on the area's potential for growth. Kapoor said the large investor dependence of the realty market has hit the genuine home buyer hard in terms of spiraling prices and delivery delays. For instance, in October 2009, M Sharma booked a flat for his son at a premium residential project at Panvel, close to the site of the proposed international airport. At that time, Sharma was told that his flat would be ready and handed over to him within two years. "It will be three years this October and the developer so far has only built 18 of the proposed 32 floors, let alone finish the project," said Sharma. He added that he was clueless about when his home would be handed over to him.
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