BHUBANESWAR: Realtors in the city have decided to put new projects on hold with stocks of unsold houses piling up all the time.
Because of slowdown in mining sector and check on flow of chit fund money to realty after various scams hit the state, the number of investors seems to have disappeared resulting in fund crunch, realtors said.
"Our assessment shows several developers are refraining from launching new projects because of the hardships they are facing to sell those already under construction in past two to three years and would be ready for possession this year or the next," said Binay Krishna Das, the state president of Confederation of Real Estate Developers Association of India (Credai).
According to a recent Credai analysis, housingprojects worth Rs 20,000 crore are under construction. Many of the projects are facing shortage of fund flow to the tune of Rs 5,000 crore.
"Because of crackdown on chit fund companies and mining scam, investors' fund from these sectors have almost stopped leaving the market to genuine middle class home buyers," Das said.
"If home loan providers become more proactive to finance the projects and housing loans to individual buyers, the situation in the city will improve irrespective of slowdown elsewhere as there is no short
age of buyers as such," he added. Around one lakh units are under advanced stages of construction in the state capital region. Of these, more than 60% remain unsold, as these houses don't suit the current buyers' profiles. "The prospective buyers are those looking for affordable houses in the range of Rs 151akh to Rs 251akh. However, those coming up are mostly abovethis bracket as we misread the market and concentrated more on highend properties. Since there are very few sales, builders are desperate to complete, these ongoing projects first and holding up new plans for the time," said Pradipta KtunarBiswasroy, the president of Real Estate Developers Association of Odisha (Reda).
According to bankers, they are treading a cautious path in fmancingprojects as demands have far exceeded supply leaving few buyers for many projects. "However, there is no such restriction for sanctioning loan to individual buyers, which is linked to progress of the projects," a State Bank of India official ssaid.
Real estate watchers attributed the woes of Bhubaneswar market mainly to the chit fund scam. "The existing projects by Grade A developers in Bhubaneswar are doing good and have already sold out close to 60°i°. Most of the projects by small developers are stuck because of the chit fund scam in the state," said Ganesh Vasudevan, CEO, Indiaproperty.com.