Why Bengalureans Investing in Real Estate Need to Beware of Project Delays
Over 2,600 real estate projects in Karnataka have missed their deadlines, leaving homebuyers in Bengaluru paying both rent and EMIs. The Karnataka Real Estate Regulatory Authority (KRERA) warns of the risks and provides insights into the causes of these delays.
Real EstateProject DelaysBengaluruKreraHomebuyersReal Estate NewsJun 04, 2025
Over 1,301 of these stalled projects have sought deadline extensions, which are currently under review, the KRERA report said. “The public is hereby informed that the project registration period for the following projects has expired and has yet to be renewed. The public is hereby warned that dealing with these projects would be at their own risk,” reads a cautionary message on the official Karnataka Real Estate Regulatory Authority (KRERA) website.
The advisory comes amid growing concerns over widespread project delays across the state, particularly in Bengaluru. Real estate experts point to several key factors behind the crisis.
Why Are Real Estate Projects Being Delayed?
One of the most common reasons for stalled projects is the slow regulatory approval process. Developers often face delays in obtaining clearances from multiple departments, including those overseeing environmental compliance, land usage, and municipal permits. These approvals can take months or even years, significantly pushing back project timelines before construction begins.
Financial instability is another major cause. Many developers rely heavily on customer advances and loans to fund construction. When property sales dip or credit becomes harder to access, projects are frequently put on hold. In several cases, funds meant for one project are diverted to others, creating cash flow shortages and compounding delays. This issue has worsened in recent years as some large real estate companies struggle with mounting debts and liquidity crises.
Poor project planning and weak execution also play a role. Some builders launch developments without conducting thorough feasibility studies or underestimate costs and timelines, leading to mismanagement and stalled progress.
Rs 667 Crore in Refunds Still Owed to Homebuyers
The financial burden of these delays is falling squarely on homebuyers. As of December 31, 2024, Karnataka’s developers owe approximately Rs 667 crore in refunds to buyers who haven’t received possession of their homes on time. These figures are based on official KRERA data.
KRERA had approved 1,660 recovery claims totaling Rs 758.8 crore. However, just 233 claims, amounting to Rs 91.8 crore, or roughly 14%, have been successfully recovered so far.
The backlog continues to grow. As of January 2024, the total pending recoveries from stalled projects stood at Rs 486 crore. By the end of December, that figure had surged by 37%, reaching nearly Rs 667 crore.
Despite numerous warnings, homebuyers remain at risk as project delays persist and enforcement remains weak. Authorities have been urged to strengthen recovery mechanisms and introduce a clear policy for project closures to protect consumer interests.
Frequently Asked Questions
What is the main reason for real estate project delays in Bengaluru?
The main reasons for delays include slow regulatory approval processes, financial instability, and poor project planning and execution.
How much money do homebuyers in Karnataka still need to be refunded?
As of December 31, 2024, developers owe approximately Rs 667 crore in refunds to homebuyers who haven’t received possession of their homes on time.
What is the role of KRERA in addressing these delays?
KRERA is responsible for warning the public about expired project registrations and is working to recover funds for affected homebuyers, but enforcement mechanisms need to be strengthened.
What should homebuyers do to protect themselves from such delays?
Homebuyers should thoroughly research projects, check KRERA registrations, and avoid projects with expired or pending registrations. They should also consider legal advice if they suspect delays.
What steps are being taken to improve the situation?
Authorities are urged to strengthen recovery mechanisms and introduce clear policies for project closures to better protect consumer interests.
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