The worrying story of homebuyers in Noida-Greater Noida

Homebuyers in Noida-Greater Noida are deeply worried. Those who booked flats in housing projects in the Noida-Greater Noida property market have left in a spot of bother with data suggesting that over 1.65 lakh flats worth Rs 1.18 lakh crore are currently stalled or significantly delayed in these two townships.

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The data was compiled by property consultant Anarock which took into account housing projects launched in 2014 or before, across seven big property markets. The property markets studied included Delhi-NCR, Mumbai Metropolitan Region, Chennai, Bengaluru, Kolkata, Hyderabad and Pune.

The Forum for People's Collective Efforts', an apex body of homebuyers, has expressed concern over the plight of customers whose investments are at stake.

While seeking stern action against defaulting builders, Forum President Abhay Upadhyay told news agency PTI that the cause of the delay of each project should be ascertained and solutions need to be found.

The Anarock data shows that till May 31, 2020, across the seven property markets, 4,79,940 housing units worth Rs 4,48,129 crore were 'stalled or heavily delayed'. Worryingly, Delhi-NCR alone accounts for a whopping 50 per cent with 2,40,610 stalled or delayed units worth Rs 1,81,410 crore.

Out of the Delhi-NCR backlog, according to Anarock data, Noida and Greater Noida region account for nearly 70 per cent of total delayed units while Gurugram's share is only 13 per cent. There are 1,65,348 units worth Rs 1,18,578 crore stalled or delayed units in Noida and Greater Noida. Gurugram has 30,733 units worth Rs 44,455 crore that are stuck or delayed followed by 22,128 units valued at Rs 9,254 crore in the Ghaziabad market.

Prashant Thakur, Senior Director and Head of Research at Anarock, said that project delays have been the bane of the Indian real estate sector over the last decade, particularly in NCR. Even the implementation of RERA (realty law) has had limited impact on this, he said. 

Prashant cited liquidity crunch as one of the reasons why such a large number of housing projects were either stalled or delayed in the NCR.

He said that the real estate activity in Greater Noida had earlier boomed on the pretext of improved connectivity to the Yamuna Expressway and builders cashed on the connectivity prospects and launched innumerable projects over the years. Many of these projects are now stuck in various stages of non-completion.

Prashant, however, said that the Union government's Rs 25,000 crore stress fund (SWAMIH), launched in 2019, had been effective in reviving many stuck projects.

Even though Anarock did not name the erring developers, projects in the Delhi-NCR that are stalled or significantly delayed include those of Jaypee Infratech, The 3C Company, Unitech and Amrapali. There are other builders who have defaulted on their promises to deliver their projects on time to customers, who have already paid almost the entire purchase price.

Many homebuyers have approached courts and the National Company Law Tribunal (NCLT) against defaulting builders to secure their investments. Jaypee Infratech Ltd went into the Corporate Insolvency Resolution Process (CIRP) in August 2017. The Supreme Court in January 2020 allowed the Centre to take total management control of Unitech, which was once the country's second-largest realty firm, and appoint a new board of nominee directors. The decision was intended to provide respite to over 12,000 hassled Unitech customers, but they are still waiting for the possession of their flats.

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