INR 1500 needed to complete stalled Property in Mumbai

With the real estate industry in India going through a rough patch, experts have estimated the amount of money that the industry would require to revive itself. Particularly, a large number of real estate projects are stalled in the metro cities, like Mumbai.These include both upcoming residential and commercial properties. In the Mumbai Metropolitan Region (MMR), the estimated amount required to bail off these projects is around INR 1,500 crore. This has been found through a recently conducted study.

Due to the delay in the completion of the real estate Property in Mumbai, the buyers have not been able to move to these properties. This is leading to a delay in possession of these homes. Presently, around 55,000 property buyers are waiting for these projects to be completed. The delay in completion has taken place primarily due to the fund crisis.

The issue related to the liquidity of funds has been plaguing the real estate sector in India for quite some time now. The developers are stuck with their projects due to the fund crisis. Presently, the industry needs a boost in terms of funds, so that the real estate builders can complete these stalled projects. In the process, these properties will become ready for acquisition.

Last week, the authorities at the Center announced that a fund, of INR 25,000 crore will be set up as an alternative investment fund. This will help the stalled projects revive themselves across the country.

A study, carried out by one of the reputed real estate analytics firms, stated that 10% of the projects registered with RERA, or 1715 towers are currently stalled in the Mumbai Metropolitan Region. In terms of floor area, these projects account for 33.4 Sq.Ft. Around 8.5 million Sq.Ft. of the area or 25% of this space is still unsold.

It is expected that these builders will find customers, once the real estate industry jumps back to its health. The firm also carried out a detailed analysis, that involved more than 10,000 projects registered with RERA in the MMR, so that they could get an idea of the stalled projects. In the last couple of years, they had made progress less than 5%. Presently, they are in the advanced stage of construction, with more than 70% of the task completed.

The survey further revealed that 60% of these projects were in the middle-income housing segment or the affordable segment. Areas, where these projects are located, include Thane, some areas beyond Thane and across the MMR. Besides, the ticket sizes of these projects are less than INR 2 crore, as per the approval of the Union Cabinet.

It is expected that once these projects are completed and sold off, the real estate industry in Mumbai will continue with its normal growth rate. Interestingly, a large number of Thane properties have been launched in the area in the last few years.

The estimates also reveal that the additional cost needed to complete all these projects is between INR 1,200 crore to INR 1,600 crore. Studies say, that the receivables from the sales that have been contracted can generate INR 4,000 to INR 5,000 crore.