The top 5 cities with maximum derelict projects in Maharashtra are MMR, Pune, Aurangabad, Nagpur and Satara.
MahaRERA’s recently released list of 407 projects ‘deadly’ in the state of Maharashtra in 2021 includes 388 residential and 19 commercial projects. ANAROCK Research’s deep dive into the data reveals that the 388 of these derelict projects account for approx. 20,955 homes, of which 52% (approximately 10,682 homes) have already been sold. The remaining 10,093 units remain unsold.
The top 5 cities in the state with the maximum number of expired projects are MMR, Pune, Aurangabad, Nagpur and Satara respectively.
* The Mumbai Metropolitan Region (MMR) has the maximum number of ‘derelict’ residential projects – 145 projects accounting for approx. 9,236 units, of which approximately 5,983 units or 65% have been sold, while 3,253 units are unsold.
* Pune has at least 92 derelict housing projects comprising 4,852 units, of which 2,488 is or approximately. 51% units have been sold, with 2,364 units unsold.
* In Aurangabad, the registration numbers of 27 housing projects have expired. There are approximately 1,116 units in these projects, of which 254 units (23%) have been sold while 862 units remain unsold.
* In Nagpur, approx. 23 housing projects account for 1,392 units, of which 777 or approx. 56% units have been sold, while the remaining 615 are unsold.
* In Satara, the RERA registration has expired for 23 housing projects consisting of 1,664 units, of which 661 or approx. 40% units have been sold, while 1,003 remain unsold.
What’s underneath?
Santhosh Kumar, Vice-President of ANAROCK Group, said: “The RERA registration numbers of these projects have expired for several reasons. RERA was implemented in 2017 and a year later the IL&FS crisis kept real estate – especially the residential segment – NBFCs have been a major source of funding for the real estate sector, with banks holding back amid rising NPAs, NBFC funding slowed significantly due to the IL&FS crisis.”
Private equity financing in the sector also slowed to a trickle as PE players became skittish and hypersensitive to market signals and began to exercise enormous caution before extending loans to developers. Class B and C developers were most affected as lending to them was minimal, affecting the construction of several projects.
Just as funding issues began to be resolved, the pandemic worsened the situation for medium-to-small players due to disruptions in the supply and demand of commodities. In the past two years, buyers have strongly favored branded projects. Medium to small players took the biggest hit, with their projects now being the most responsible for the list of expired RERA registrations.
“Fortunately, government-backed funds are now identifying near-completion projects and providing last-mile funding,” said Santhosh Kumar. “Also, some of the bigger developers are taking over and breathing new life into other smaller projects.”