The Indian real estate sector is grappling with a significant crisis as nearly 2,000 housing projects, totalling over 5 lakh units, remain stalled across 44 cities. This alarming trend, attributed primarily to financial mismanagement and execution deficiencies by developers, has been highlighted in a recent analysis by PropEquity.
According to the data released on August 15, Greater Noida leads the list of Tier 1 cities with the highest number of stalled units, totalling 74,645 units spread across 167 projects. This represents a staggering 17% of the total stalled units in Tier 1 cities. It is followed by Thane and Gurugram, with 57,520 units in 186 projects (13%) and 52,509 units in 158 projects (12%) respectively. Mumbai records the highest number of stalled projects with 234 projects and 37,883 units, while Bengaluru follows with 225 projects encompassing 39,908 units.
In other notable cities, Kolkata has 82 stalled projects with 24,174 units, Chennai has 92 projects with 21,867 units, and Hyderabad reports 25 projects with 6,169 units. Pune also reflects a significant issue with 172 stalled projects and 24,129 units. The report underscores a troubling rise in stalled units, increasing to 5.08 lakh from 4.65 lakh units in 2018—an uptick of approximately 9%. The breakdown reveals that 1,636 projects across 14 Tier 1 cities are stalled, accounting for 4,31,946 units, while 345 projects in 28 Tier 2 cities contribute 76,256 units to the backlog.
Samir Jasuja, Founder and CEO of PropEquity, attributed the surge in stalled projects to developers’ lack of execution capabilities, poor cash flow management, and the diversion of funds towards acquiring new land or settling other financial obligations. Jasuja advocates for an independent third-party audit service to enable homebuyers to assess developers’ ability to complete projects on time. To mitigate the impact of stalled projects, the Government introduced the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund in November 2019. The fund has amassed Rs 15,530 crore with the objective of completing stalled projects. However, it has thus far managed to deliver only approximately 32,000 units. The SWAMIH Fund aims to deliver 20,000 homes annually over the next three years.
The report also highlights the growing backlog of legal disputes related to real estate projects, urging homebuyers to conduct thorough due diligence through professional experts before committing to new properties. This development underscores the pressing need for systemic reforms and enhanced oversight in the Indian real estate sector to address the escalating crisis of stalled housing projects and ensure timely project completions.
