Stuck in Limbo: Will Homebuyers Ever Get Their Dream Homes?
Thousands of homebuyers are still waiting to receive their apartments from stressed real estate projects. Despite the boom in the sector, resolution and execution remain the biggest roadblocks.
Real EstateStressed ProjectsHomebuyersNbccSupertechAmrapali GroupReal EstateJul 15, 2024
In 2011, Puneet Parashar booked a three-bedroom apartment in Amrapali Group's 'HeartBeat City' township in Noida. The project stalled in 2013, and Parashar was forced to live on rent in Noida. In 2019, the Supreme Court appointed NBCC (India) Ltd to take over the task of completing 24 projects of Amrapali Group, including Parashar's apartment. While NBCC has made progress, with 21,000 flats completed and the handover process ongoing, the remaining 17,000 apartments are yet to be completed.
Supertech, another developer, is facing similar issues. The company's stressed portfolio has not seen much progress in terms of resolution, with 17,000 unfinished apartments in the twin cities of Noida and Greater Noida. The demolition of Supertech's illegal twin towers in Noida in 2022 was a warning to errant developers, but it has not led to any significant progress in resolving the issues.
The Indian Banks' Association estimated that 412,000 stressed residential units, involving ₹4.08 trillion, have been impacted by stalled real estate projects. More than half of these units are in the National Capital Region (NCR), followed by the Mumbai Metropolitan Region (MMR), Pune, Bengaluru, and other metro cities.\n\nThe government has introduced measures such as the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund to address the issue of stressed projects. The ₹15,534 crore fund has committed over ₹11,000 crore across more than 100 projects. However, the fund's effectiveness in resolving the issue remains to be seen.
Experts say that resolution is a function of many stakeholders coming to terms, and it is happening gradually, with many such cases still stuck in courts. The emergence of distressed asset credit funds is also expected to improve the accessibility of last-mile funding for project completion, supporting faster restructuring of debt by promoters with asset reconstruction companies.
Despite the challenges, homebuyers are hopeful of receiving their apartments soon. Rashmi Singhal, who booked a four-bedroom apartment at 'Krescent Homes' in Jaypee Wish Town, Noida, is one such homebuyer. After years of living on rent, Singhal finally bought a small flat in Greater Noida on resale earlier this year and moved there. However, her hopes of moving into Krescent Homes are now closer to reality, with Suraksha Group taking over the project and planning to complete the construction of 12,000 apartments across 101 residential towers in 18-40 months.
The real estate market in NCR has been transformed since these projects were launched in Gurugram and Dwarka Expressway. Thanks to the Dwarka Expressway and shopping malls, and many gated communities, the whole micro-market has changed. The good thing is that the real estate market is doing well both in sales and prices, which encourages other professionally managed developers to pick up stuck projects and revive them.
Frequently Asked Questions
What is the current state of the Indian real estate sector?
The Indian real estate sector has seen a significant turnaround since 2021, with rising sales and property prices, lower unsold stock, aggressive land-buying, and project launches.
How many stressed residential units are impacted by stalled real estate projects?
According to the Indian Banks' Association, 412,000 stressed residential units, involving ₹4.08 trillion, have been impacted by stalled real estate projects.
What is the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund?
The SWAMIH fund is a ₹15,534 crore fund introduced by the government to address the issue of stressed projects. It has committed over ₹11,000 crore across more than 100 projects.
What is the status of the Amrapali Group's projects?
NBCC (India) Ltd has taken over the task of completing 24 projects of Amrapali Group, including 38,000 residential units. So far, 21,000 flats have been completed, and the handover process is ongoing.
What is the status of the Supertech's projects?
Supertech's stressed portfolio has not seen much progress in terms of resolution, with 17,000 unfinished apartments in the twin cities of Noida and Greater Noida.
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