Delhi-NCR and Mumbai contributes 84% of total projects delays

BENGALURU: Against the common perception that the entire residential real estate segment is troubled, it is the upper middle income and premium property projects that are majorly delayed with Delhi-NCR and Mumbai being major contributors.

According to the aggregate data by JLL, total number of residential units classified as delayed/stalled in the top seven cites stands at 4.54 lakh. However, as high as 84 per cent of these units are present in two major metro cities: Delhi NCR (62%) and Mumbai (22%). “Needless to say, these two cities had always been on the radar of investors due to the promising returns and the scope for expansion that they offered. The percentage share of rest of the cities is in single digit,” said JLL.

In monetary terms, the delayed/stalled projects stand at a whopping Rs 4.62 lakh crore and Delhi NCR and Mumbai again account for nearly 90% of this value. Even at the city level, it is important to note that in Delhi, around 3/4^th of the residential units are delayed/stalled and one out of every three residential units in Mumbai falls in the same category. “For rest of the cities, this proportion is not significant. The large proportion of delayed projects being concentrated in these two cities is alarming,” said Samantak Das, Chief Economist and Head of Research & REIS, JLL India.

According to JLL, reality is not all that grim as the funds are mainly stuck in projects belonging to the upper-mid and premium categories. This is reflected in the average price of residential units across cities. For instance, the average price of delayed residenti al units stands at INR 1.99 crore for Mumbai as compared to Rs 95 lakh in Bangalore, Rs 94 lakh in Hyderabad and Rs 87 lakh in Chennai.

“First, residential project delay is not a pan-India phenomenon and only limited to major metropolitan cities of Delhi NCR and Mumbai in terms of quantum as well as value of projects. Second, the slowdown in completion of projects is not across the entire spectrum of housing categories but significantly visible in upper-mid and premium categories,” said Das.