Housing Sector Anticipates Supply Shortage Due to Project Delays
Prospective homebuyers may have an extended waiting period of one to two years for newly constructed residences. Predictions for 2013 suggested a surge in completed projects; however, current progress indicates a potential supply shortage within the housing sector.
Despite assurances from developers about nearing project completion, market experts remain skeptical. The sector might not meet the projected timelines.
Housing sector will receive lower housing launches this year.
A report by a leading property consultant indicates that most major cities, except Chennai, are likely to experience a reduction in supply, falling significantly short of anticipated targets.
For example, developers in Gurgaon delivered 360 flats in the initial two months of 2013. Initial projections aimed for 38,684 housing units by year-end, translating to a monthly delivery target exceeding 300 units, a pace unmet after the initial months.
Township projects will face delay in delivery, affecting housing sector.
Cities like Noida, witnessing delivery of only 160 units against an expected 49,540, and Mumbai, with 1,378 units delivered versus a target of 22,820, exhibit similar trends. These metropolitan areas are unlikely to achieve their projected delivery numbers.
Chennai stands out with delivery of 6,024 units in the first two months, indicating the city is on track to meet its year-end target of 51,592 units.
The primary cause for delays is a divergence in developer strategies. Many developers are shifting focus to new ventures, thereby affecting the completion of committed projects. Some are prioritizing existing commitments, while others pursue new opportunities.
Samir Jasuja, the founder and CEO of PropEquity, stated, "Smaller projects may be completed in time but not big residential projects like township. The bigger projects will face delivery delay."
Another property expert supported this view, commenting that developers are unlikely to finalize half of the ongoing projects. This expert also recognizes the potential for reduced housing deliveries, which may force potential buyers to explore alternative options.