An average delay of two three years, going up to seven or eight and even 12 years on the longer end, is symptomatic of the deep malaise in the real estate industry in NCR today.
The flat market has been, well, flat for at least a couple of years now, kept in prolonged downturn by a vicious cycle -long delays in possession eroding buyer confidence, in turn drying up cash flow and leaving builders who had diver ted funds to launch new projects with little to finish the old ones. ..
Why did this happen? In 2004-05, large chunks of agriculture land were sold or leased by the UP and Haryana governments to realtors in Noida and Gurgaon. It coincided with private companies setting up base in these cities and NCR beginning to take joint control of the country’s economic levers.
Housing projects were announced in a rush. Bookings took off immediately. Condominiums sprouted thick and fast. The problems started some years later. First, the farmers’ protests in Greater Noida locked large land parcels in litigation. Second, an NGT notice stopped construction of buildings within 10 km of the Okhla Bird Sanctuary. It wasn’t until 2015 that these legal battle came to a close and nods for construction came through.
But long years of uncertainty took a toll on buyer and builder. Stories of financial stress coupled with distress over pending deliveries abound. In the second part of our series on the state of real estate in NCR, TOI features some people who are paying both EMI and rent but are still waiting for flats booked many years ago to be delivered to them. Though builders pay a penalty for delays, they often cite various reasons not to do so. Besides, a tax deduction of Rs 2 lakh a year is allowed against payment of interest on home loans if a house is acquired within three years of taking the loan. After this, the deduction plunges to Rs 30,000, so a delay in excess of that is, financially, bad news.
Paid 95%, waiting for 8 years
NAME | Sachin Tanwar PROJECT | BPTP Park Serene CITY | Gurgaon YEAR OF PURCHASE | April 2008 FUNDING | Size of loan, 30.8 lakh EMI | 26,500 FLAT COST | 56 lakh CURRENT HOUSE RENT | 33,000
The builder had committed to deliver flats by September 2011. The company has taken 95% payment and eight years have passed but I still don’t know when my flat will be delivered. Each time I ask, they say three months.
Have knocked on CM’s door
NAME | Manish Kumar PROJECT | Unitech, The Residencies CITY | Gurgaon YEAR OF PURCHASE | 2009 FUNDING | Size of loan, 43 lakh EMI | 20,500 CURRENT HOUSE RENT | 50,000
The builder has been dodging us for several years. Only the structure of the building has been made so far. I hardly see work being done there. Every time we go and meet the builder, we are told we will get the apartments in six months.
An apartment shown as part of a low-rise building in the original plan was changed to a high rise later. This meant our building would be blocked from three sides with no air or sunlight. So we protested and refused to take possession.
Credits Economic Times