Major Indian cities have witnessed decline in pending apartments for sale as developers reduced their investments in new developments. Analysis for Indian real estate by ANAROCK Property Consultants....

City-level break-up

MMR has the highest qualifying stock with 92,350 units (37% share) with at least 60,000 units in the affordable category
Pune comes next with 67,240 units - a 27% overall share
While projects by Jaypee, Amrapali and Unitech in NCR do not qualify, at least 60,700 homes across the entire region may see revival. At least 30,030 units are in the affordable category, the remaining in the mid-segment.
In Bangalore, Hyderabad and Chennai, merely 9% of the total units can avail of the government’s benefit when it is implemented. These three markets have a combined inventory of 22,040 delayed units that fall within the sub-range of INR 80 lakhs, the maximum being in Bangalore with 11,880 units, followed by Chennai with 8,960 units and Hyderabad with 1,200 units.
In Kolkata, at least 9,600 stressed units will be eligible for the government’s relief.

Key Issues

Among the key issues that remain, the price definition of mid-segment homes that can avail of this benefit tops the list. Secondly, the timeline for setting up this fund and its actual implementation needs clarification. If the implementation process is delayed over the next four to five months, more units could either turn into NPAs or fall under NCLT - thus eliminating their eligibility for this funding.

Finally, there are a total of 5.76 units (launched in 2013 or before) across budget segments that are stuck in various stages of non-completion in the top 7 cities alone. These also include units falling under NPAs or NCLT. Even if we consider those that are eligible for government funding (approx. 4 lakh units), within these there are at least 1.5 lakh units that are priced >INR 80 lakh budget and hence will not qualify under the said caveats.

Homebuyers stuck within such units will continue their wait for light at the end of the tunnel.

Will it spur demand?

The setting up of the special window of INR 20,000 crore for last-mile funding of stuck projects addresses the key issue of delayed housing projects across the country. The FM has sent a positive signal even though several thousand crores are still needed.

It may not impact new demand significantly - but will give relief to aggrieved homebuyers who had been waiting anxiously for their homes before the start of the festive season. That said, it will go a considerable way in improving overall buyer sentiments and will also help fix the supply side in the residential segment.