The reluctance of banks to fund real estate projects due to rising NPAs and the slowdown in funding from the NBFCs and private equity companies has hit the real estate developers, especially medium to small players. The Corona pandemic has further aggravated the situation, with the construction of a large number of residential and commercial projects, getting severely impacted, leading to many of these projects getting lapsed.
The biggest residential market of Mumbai Metropolitan Region (MMR) has been severely impacted. MahaRERA’s statistics clearly point to this. As many as 407 projects got ‘lapsed’ in 2021 across the state of Maharashtra. This includes 388 residential and 19 commercial projects. ANAROCK Research’s data reveals that 388 of these lapsed projects account for approx. 20,955 housing units, of which 52% (approx. 10,682 units) are already sold. The remaining 10,093 units remain unsold.
The top 5 cities in the state with the maximum lapsed projects are MMR, Pune, Aurangabad, Nagpur, and Satara, respectively.MMR has the maximum number of ‘lapsed’ residential projects – 145 projects, accounting for about. 9,236 units, of which roughly. 5,983 units or 65% are sold while 3,253 units are unsold. Pune has at least 92 lapsed housing projects, comprising 4,852 units, of which 2,488 or about. 51% of units are sold, with 2,364 units remaining unsold.In Aurangabad, the registration numbers of 27 housing projects have expired. There are approx. 1,116 units in these projects, of which 254 units (23%) are sold while 862 units remain unsold. In Nagpur, about 23 housing projects account for 1,392 units, of which 777 or approx. 56% of units are sold while the remaining 615 are unsold. Similarly, in Satara, RERA registration has lapsed for 23 housing projects comprising 1,664 units, of which 661 or approx. 40% units are sold while 1,003 remain unsold..
Fortunately, the government-backed SWAMIH Fund is now identifying projects that are nearing completion and providing last-mile funding to them. Also, some of the larger developers are taking over and reviving other smaller projects. Yet, while buying a house, one should ascertain whether the housing project in which the residential unit lies, has a lapsed or functional RERA registration. This can be checked by visiting the website of RERA of a particular state in which the housing project lies.