Timely delivery of #housing projects is one of the key concerns of #homebuyers, and certainly as they scout the market for good deals this festive season, in a year that has seen major shocks to the economy, it will be a priority. Smart homebuyers recognise the fact that rather than looking for cheap deals from unreliable developers, it would be wiser to opt for Grade A projects from companies that have a good execution track record. As someone wise once said, “If something is too good to be true, it probably isn’t.”
There have been far too many stories of buyers who, after investing in a #property, have waited for their homes, sometimes even a decade later. While this was especially true in the past when the market was unregulated and when many smaller players, some of them fly-by-night ones, promised more than they were capable of delivering, it is still a problem for many today.
A PropEquity report, with data updated as of July 2020, finds that the average delay for projects in Pune in 2019 was 16 months (up from a 13-month delay in 2016). In Mumbai, the delay was up to 27 months, from 20 in 2016. In Navi Mumbai, projects were delayed on an average by 21 months, as opposed to 17 months in 2016, while in Thane, the average delay was as much as 25 months, up from 17, three years earlier. The report indicates that as much as 40% of the supply delivered in 2016-2019 saw execution delays.
As we were all adjusting to the new normal and realty pundits were making dire predictions about a slowdown soon after the coronavirus restrictions came in, the Magicbricks Sentiment Survey in May 2020 also pointed out the importance of on-time delivery. Timely completion of projects is seen to be one of the key triggers to revive buyer sentiments and encourage them to buy a property, the report said.
TRUST IS THE KEY
While not all delays are in the developers’ hands – building approvals, for instance, can sometimes take much longer than planned – strong fundamentals and experience can make all the difference to ensuring realistic schedules and timely delivery. On-time delivery depends on every stage of the project, from the initial planning to efficient project management every step of the way; a single small delay can have a cascading effect.
Regulations such as the Real Estate (Regulation and Development) Act, 2016 (RERA) have tried to inspire confidence among homebuyers. In fact, timely completion of housing projects and on-time delivery of apartments/units is an essential aspect of the agreement to be signed between homebuyers and builders; the sale agreement must specifically mention the date of possession and interest to be paid in case of any default. RERA has done much to boost confidence in the real estate sector and consolidate it; smaller developers who are unable to meet its norms have chosen either to exit or to merge with larger, more organised entities.
Whatever the hurdles, in the end, it is customer satisfaction and confidence that matters, and that must always come first. Lower prices or discounts have no meaning if buyers must wait well beyond the expected time for their homes to materialise. Homebuyers have EMIs on home loans to pay back, and often live in rental apartments; delayed possession can be disastrous for them.
In a scenario where projects are often delayed and customers are risk-averse, the demand for ready-to-move-in homes is on the rise. But the supply of such homes, especially in the Grade A category, is shrinking, and will almost certainly dry up in the next year or so. Customers then, must do the next best thing – look for under-construction properties from developers with a strong track record, not just of engineering excellence, but also of timely delivery. Developers who are unable to hand over homes on time will certainly lose out.
As Ban Ki-moon, Former Secretary-General, United Nations, pointed out: “The longer we delay, the more we will pay.”