40% of new projects in Noida delayed
Mar 31, 2014
Source : The Times of India


NOIDA: Ramesh Saxena, a 29-year-old IT professional, had booked a flat in Noida Extension in early 2009. He was promised delivery in three years. But with his dream home nowhere near completion, he is paying Rs 20,000 a month as rent in Vaishali — apart from shelling out even an larger sum as EMI for the home loan.

"I am spending almost Rs 50,000 on rent and EMI. That leaves me with hardly any money. My father, a retired government employee, uses his pension money for other expenses," said an exasperated Saxena, who had planned to get married only after moving into his own home. His marriage plans, too, are now indefinitely delayed.

Lakhs of middle class families who booked homes in Noida region have similar harrowing tales. Industry estimates suggest that almost half of the four lakh residential units planned in Ghaziabad, Noida and Greater Noida (which includes Noida Extension) are delayed. Among the projects under construction, over 40% are running behind schedule.

"The problem (of delayed possession) is really serious. Most of the projects launched in the last four-five years or even before that have still not been delivered to buyers. Because of this end-users are losing faith in builders' ability to deliver on time and the latter's credentials have gone down drastically. This is one of the reasons why real estate is at a low point," said Santhosh Kumar, CEO (operations) of Jones Lang LaSalle (JLL).

Kumar's grim picture of realty's reality comes from these figures given by JLL. At present, a total of 2.3 lakh residential units are under construction with 1.1 lakh in Noida (city and expressway); 94,500 in Noida Extension and 24,600 in Greater Noida (including Yamuna Expressway). "Of these, 231,956 residential units are under construction, 95,859 (or a whopping 41%) are running behind schedule, with maximum delay being four years," he said.

Industry sources say that while land acquisitions problems have delayed projects, especially in Noida Extension — now Greater Noida (west) — the real problem is elsewhere. "Builders launch a project and based on its prime position, get buyers in droves. But instead of using this money to complete that project, they go on an expansion spree. Today most big names have a plethora of projects but hardly any of them are ready," said a Noida-based property dealer who did not wish to be named.

Despite the grim ground reality, buyers have no relief from any quarter. A mere Rs 5-10 per square feet is the penalty for delay, and developers find ways to deny even that to buyers.

"In case of construction delays beyond the average stipulated time period of three years and a grace of three months, a few developers pay back some form of penalty either adjusted against the bill or as cash back to the customers. The penalty ranges from approx Rs 5 to Rs 10 per sq ft of the unit area," said PropEquity CEO Samir Jasuja.

Even this is often denied to buyers. Many builders claim to give extra super area -- which means not the carpet area of your home but the public spaces of your building, like stairs — instead. The only remedy for buyers seems to be going to consumer courts as successive UP governments have tended to be builder-friendly.

Lawyers dealing in consumer courts say they see a rush of such cases as this is the only place for harried buyers. "Buyers may get reasonable amounts as compensation for delayed possession from consumer courts but builders in almost all such cases challenge these orders and field legal eagles in higher courts of appeal. The buyer, therefore, is helpless there too," said a lawyer on condition of anonymity.

Not surprisingly, AAP-style dharnas and agitations in front of builders' offices or project sites have become a regular feature. "We have been duped by our builder. We were supposed to get our home two years back and there is still no sign of our apartment building on ground. The compensation for delayed delivery should be linked to market rates. We buy flats and then get treated like beggars," said Pankaj Pokhriyal who has booked a flat in one of the biggest upcoming cities on Noida-Greater Noida Expressway.

"The real estate sector is still not governed by any blanket law due to which it lacks transparency and permits developers to flout monopolistic policies. With the advent of the Real Estate Regulator Bill, passed in the assembly in 2013, we are expecting strict rules safeguarding the interests of the customers," said PropEquity's Jasuja.

Till that happens, all buyers can do is curse their stars or suffer in silence.

Latest Realty News

Planned development, vast green cover
Mar 31, 2014
NOIDA: Noida is one of the few cities in the country which is known for its planned development—also , it has a lot of greenery and open spaces. It has far more planned urban infrastructure, with clear demarcation of residential and commercial sectors, than most other real estate destinations of the NCR.
Plea to make Delhi roads friendly for the physically-challenged
Mar 29, 2014
DELHI: The Delhi High Court on Wednesday issued notices the Delhi Government, the New Delhi Municipal Council, the three Municipal Corporations of Delhi, the Delhi Police and the Delhi Development Authority on a public interest litigation seeking directions to make the Capital’s roads friendly for the visually and hearing-impaired pedestrians.
India-China to collaborate on building semi-high speed rail
Mar 29, 2014
DELHI: India and China would look at collaborations in semi-high speed rail and building world-class railway stations. This was decided at the strategic and economic dialogue between the two countries earlier this month when an Indian delegation, headed by Planning Commission deputy chairman Montek Singh Ahluwalia, had visited Beijing.
DDA's Master Plan 2021 to check realty prices in Noida, Gurgaon
Mar 29, 2014
DELHI: Hailing the 2021 Master Plan of Delhi Development Authority ( DDA) that envisage Land Pooling Scheme (LPS), the NCR developers have opined that it would help in checking the skyrocketing prices of housing units in Delhi as well as NCR. The industry insiders opined that these would be at least 15-20 percent cheaper as compared to the projected prices of the realty properties in next three to four years because it is aimed at hitting the demand-supply constraint both for developers and the
‘DDA granted undue benefits to Kathputli Colony redeveloper’
Mar 29, 2014
DELHI: The Aam Aadmi Party on Wednesday charged the Delhi Development Authority with giving “undue benefits” to the Raheja Developers while granting it a contract in 2011 to redevelop the Kathputli Colony near Shadipur bus depot on public-private partnership basis.
Demand for houses declines in third quarter
Mar 29, 2014
DELHI: The slowdown in economy coupled with rise in interest rates and uncertain job prospects has hit the demand for real estate. In the third quarter of 2013-14, sales volumes declined 43 per cent to 11.8 million sq ft from 21.9 million sq. ft in the same period last year, says a study by Knight Frank. Despite this, study says, the annual rise in prices of residential units in the last eight quarters is around 10 per cent.
Report: Sales volume of listed real estate cos plunges 43%
Mar 28, 2014
PUNE: A research report by property consultants Knight Frank India has found that the volumes of 25 listed real estate companies over the past eight quarters has dropped from 21.85 million sq ft to 11.8 m sq ft, representing a decline of almost 43 per cent.
Election cash call puts strain on construction, real estate
Mar 28, 2014
DELHI: As India's mammoth general election approaches, jackhammer drills are quietening down at construction sites and earthmovers and cranes remain parked.
Demand for houses declines in Q3
Mar 28, 2014
DELHI: The slowdown in economy coupled with rise in interest rates and uncertain job prospects has hit the demand for real estate. In the third quarter of 2013-14, sales volumes declined 43% to 11.8 million sq ft from 21.9 million sq. ft in the same period last year, says a study by Knight Frank. Despite this, study says, the annual rise in prices of residential units in the last eight quarters is around 10%.
How to make home purchase stress free
Mar 28, 2014
DELHI: What are some of the most difficult and emotionally stressful experiences in any person’s life? We can easily list the top four: The death of a loved one, breakdown of a marriage, change of jobs and buying a home. Does the last point really belong to this list? Actually, it does.

Latest Realty News Of State

Realty Talk's