NEW DELHI/CHENNAI: Annoyed with the delays in handing over properties and deficiencies in services, home buyers are protesting against real estate developers either through marches or through the social media.
In the past six months, several leading developers such as DLF, Unitech, Oberoi Realty and Supertech have been at the receiving end of the buyers’ wrath.
One such protest, which began in the Delhi-NCR region, is now spreading to cities such as Mumbai, Bangalore and Chennai, where execution delay is taking a toll on consumer patience. Developers, on their part, blame funding costs along with slowdown in the sector for the delays.
The Delhi-National Capital Region has a majority of under-construction properties. It accounts for about 65 per cent of the total housing stock in the country.
“About 50 of us gathered for a peaceful protest to convey our grievance to investors, bankers, shareholders and the Unitech management about the delay in giving possession of Uniworld Two. The project, launched in 2008, is yet to be completed. We are thinking of taking legal recourse as the company has got its share of money through the construction-linked scheme but is yet to give timely delivery,” Shailendra Bais, a home buyer, said.
He said the association had about 300 (out of about 850) home owners from both India and abroad who had connected through Facebook and were planning a protest march.
The largest developer DLF, too, was at the receiving end with about 500 homebuyers of DLF New Town Heights, Gurgaon, protesting against delayed possession of flats. They alleged they had incurred a collective loss of over Rs 680 crore in the project, launched in 2008.
Similarly, Mumbai-based Oberoi Realty, too, had its share of trouble with residents alleging, among other things, delay in forming residents’ society and change in project plans. About 400 residents are seeking Rs 600 crore as compensation for alleged irregularities in services.
Real estate sector watchers note that most companies that were struggling with deliveries had launched projects under the construction-linked plan, where a chunk of money is taken upfront while the balance as the construction progresses. However, with the downturn in the economy, funding and raw material costs had spiralled, leading to project delays.
Santhosh Kumar, CEO, Operations, Jones Lang LaSalle India, said delayed delivery of residential projects had become a major issue, leading to high levels of ire among customers.
In terms of the average delay in delivering residential projects across India, over 25 per cent of the committed supply has not been able to hit the market according to schedule. NCR’s performance in terms of delivery of residential supply in 2013 has been the worst. In Gurgaon, only one-third of the total committed supply for 2013 has been delivered so far.
Buyers, therefore, would do well to look for approved projects, with bank funding, where more due diligence is done. It is better to buy complete or near-complete projects, rather than go for pre-sales projects, even if there is a good discount, say experts.