Mumbai May Get Largest Share Of Real Estate Bailout Package Pie
A large part of the government’s recently announced alternative investment fund (AIF) might be granted to complete the stuck housing projects in the Mumbai Metropolitan Region (MMR), primarily because they meet the eligible criterion laid under the Rs 25,000-crore bailout package.
PropTiger.com data shows that half of the 1,665 RERA-registered housing projects that are delayed by over five years across India and are likely to see completion only after 2020, are in the MMR. Over two lakh housing units are delayed in the region in a total of 880 projects. Next in line is the National Capital Region (the NCR market includes Noida, Greater Noida and Gurgaon) where over a lakh housing units in 125 projects are facing delays of over five years and are now promised to be delivered after 2020.
“Housing projects in the MMR are more likely to meet the net-worth positive and litigation-free conditions set under the AIF. This would mean a large part of the Rs 25,000-crore fund could be spent on completing projects in Mumbai. Also, Mumbai being an expensive property market, the cost of project completion here would be comparatively lower than the ultimate price realisation. This would only help Mumbai’s case further,” says Dhruv Agarwala, Group CEO, Elara Technologies.
To get funds from the government under the AIF, a housing unit has to meet several conditions. Apart from being RERA-registered, net-worth positive and free from litigation, a housing project must be meant for the middle and low-income groups and must be nearing completion to receive monetary support from the government.
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List of projects delayed by over 5 years; set to see completion after 2020
No. of delayed projects
No. of delayed units
*Includes Mumbai, Navi Mumbai, Thane
Note: Units of only up to 200-square-metre carpet area have been covered in the analysis. While the budget range for housing projects in the MMR has been kept at Rs 2 crore, it’s less than Rs 1.50 crore for other markets.
Source: PropTiger DataLabs
A total of 11,679 delayed units across 24 projects are set for delivery in the Chennai market, the lowest level seen in a city. Considering this is a market where builders typically launch small housing projects with 50 units or less, these lower the scope of delays and cost overruns.
Majority of the projects covered in the analysis have been stuck owing to liquidity crunch, delays in approvals, a periodic ban on construction activities and litigation.