Project Delays Impact NCR Residential Market
Impact of Construction Delays on Homebuyers and the Market
The NCR residential market is grappling with the significant consequences of widespread project delays. Prospective homebuyers are facing prolonged waiting periods. According to a recent report by Knight Frank, new property launches in the Delhi-NCR region have plummeted by 31%, negatively impacting the residential market. The report indicates that there are roughly 140,000 unsold residential units across the NCR region, with over 27% currently under construction.
Declining New Launches and Future Projections by Knight Frank
Knight Frank India's report reveals that approximately 33,500 residential units were launched in the latter half of the 2012-13 fiscal year, representing a substantial 31% decline. This global property consultant cautions that the slowdown in new launches is likely to persist in the coming months, further impacting the region's largest residential market. Specifically, the consultant predicts that new launches will see a slowdown in the coming months, affecting the largest residential market.
Challenges Faced by Real Estate Developers in Project Completion
Real estate developers are encountering substantial difficulties in completing projects. One of the key challenges is the escalating cost of raw materials, which has significantly increased construction expenses and necessitates higher investments from developers. The difficulty in securing adequate funding further exacerbates the issue of project delays.
Liquidity Crisis and Limited Funding for Developers
Real estate developers are currently facing a liquidity crisis, with restricted access to both domestic and international funding sources. This financial constraint forces them to curtail construction activities, contributing to the slowdown in project completion.
Growth in New Launches and Regional Distribution
Despite the challenges, there has been a 6% increase in new launches compared to the first half of the year. Greater Noida has accounted for nearly half of the total launches throughout the year, registering a significant 40% year-on-year increase. Knight Frank reports that prices for new launches in Greater Noida range from Rs. 2,900 to Rs. 3,500 per sq. ft.
Under-Construction Projects and Unsold Inventory Distribution Across NCR
Approximately 520,000 housing units are currently under construction in the NCR region, however, it is anticipated that only about half of these units will be completed by the end of 2014. Noida and Greater Noida account for 58% of the ongoing under-construction projects, while Gurgaon holds 24% of them. Moreover, approximately 66% of the total unsold properties are located between Noida and Greater Noida. In addition to project delays, execution delays have also negatively impacted the residential market in NCR.