Hard-earned money of thousands of homebuyers is at stake, as at least 135 real estate projects have defaulted on payment of land cost to the government in Noida, Greater Noida and Yamuna Expressway areas. The amount is staggering Rs 10,000 crore and it is bound to increase further, if the authorities concerned don't reschedule their debt.
Documents accessed by dna reveal that the list of defaulters include leading builders, like ATS, Unitech, Supertech, Oris , Omax and Logix. They among other builders failed to pay Rs 3,800 crore to Noida authority for 110 projects, Rs 3,400 crore to Greater Noida Authority in 15 projects and Rs 1,000 crore to Yamuna Expressway in just 10 projects.
The Greater Noida Authority has cancelled allotment of a 100-acre plot to Unitech in November 2015, when he failed to cough up Rs 1,000 crore towards loan. Surprisingly, Unitech had already allotted the flats to homebuyers on this plot, even when it had not obtained any approval from the concerned authorities and had not cleared land dues.
In defence, Rohtas Goyal of Omax told dna: "The authority cannot cancel the land allotment merely on grounds of delay in loan payment, since the developer has already sold off built-up area to customers. Land lease may be cancelled, if the project has not yet been launched. There is no buyer in this bad market. The authority has no option but to reschedule our payments.''
Despite several attempts through email, smses and phone calls, Unitech, Supertech, Oris and Logix did not reply to dna's queries.
The near crash in realty sector in National Capital Region area also hints at a larger picture. Recent data released by Ambit Capital and Prop Equity reveal that the new launches in realty sector has reached to a single digit – four in NCR, nine in Mumbai and two in Pune.
Initially, the builders had generated funds through new launches. But the less enthusiasm from buyers' side has resulted in significant decline of new launches. New launch volumes are down to 40-80 per cent on a pan-India level (See box). Builders are struggling to clear old inventory. As Realty consultant Knight Frank data shows that NCR 192,568 and Mumbai have 204,040 housing units inventory, which will take two to three years to be cleared.
The development authorities are also worried. Sales are down and heavy inventory in last 10 quarters of unsold apartments are major cause of defaults. Confederation of Real Estate Developers Associations of India (CREDAI) president and ATS MD Getamber Anand said: "The reasons for the same [default] are many folds such as the land acquisition issue on Yamuna Expressway and parts of Greater Noida and also mainly the slowdown in the real estate sector for the past two years."
In this mess, however, the homebuyers remain the victims, as the builders as well as the banks, which gave them home loans, did not share real position of the land ownership. Apparently, this also smacks of nexus between the builders and the government officials for keeping the land ownership a secret, when the booking for the houses started.
Abhishek Kumar, president of Noida buyers' association, said:"Buyers are not at fault. Our prime concern is for the ones who booked and paid money and are now waiting for the possession. We will ask authorities to provide alternate flats on similar rates before cancellation of land deals.''
Interestingly, the payment plan for the builders as specified by the development authorities was quite liberal. Under this plan, builders had to pay entire loan amount in three yearly instalments – 10 per cent, 20 per cent and final instalment of 70 per cent.. Besides, the builders were also given six-month of grace period. Builders are now lobbying for rescheduling of their debts.
New Launches dropped in 2015
Period NCR Mumbai Pune
Jan-March 2012 24 41 22
Jan-March 2013 27 31 16
Jan-March 2014 20 22 13
Jan-March 2015 4 9 2
Source-Ambit capital, prop equity
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