Residential projects launched post-RERA show much better completion rate

• Out of a total of 1,642 RERA-registered residential projects initiated in the top 7 cities between H2 2017 to 2018, 86% have reached completion.
  
• In 2022, a total of over 4.02 lakh homes were successfully completed across the top 7 cities, marking the highest annual completions since 2017.
  
• Lockdowns, supply chain disruptions, and labour shortages collectively delayed projects, impacting developers of all sizes.
  

The Real Estate Regulatory Act (RERA) was introduced in 2016-17 with the primary objective of addressing a longstanding issue in the real estate sector – the plight of homebuyers who often found themselves entangled in delayed or abandoned housing projects. The act was enacted to establish a regulatory framework that would provide a safety net for homebuyers, ensuring their interests were safeguarded throughout the homebuying process.

The objective of RERA has been achieved to a large extent with the latest data by ANAROCK Research indicating that a substantial 86% of residential projects launched during the post-RERA period from the second half of 2017 and the entirety of 2018 have been successfully completed. This data specifically focuses on projects from these two years, as most housing developments are typically completed within a span of five years, barring exceptions such as large townships.

Out of a total of 1,642 RERA-registered residential projects initiated in the top 7 cities during this 1.5-year timeframe, 1,409 have reached completion, despite facing considerable challenges such as the disruptions caused by the Covid-19 pandemic and the supply chain disruptions resulting from the conflict in Europe between Russia and Ukraine.


Source: ANAROCK Research

Says Anuj Puri, chairman, ANAROCK Group, "When it comes to ensuring timely delivery of residential real estate projects, RERA has delivered resoundingly wherever it has been fully deployed. The overall completion rate of 86% across the top 7 cities in the 1.5 following RERA implementation is remarkable, especially considering the market circumstances prior to its deployment."

Chennai has the highest completion rate while Kolkata lags behind

Starting from the second half of 2017, there has been a strong commitment to delivering projects at all costs, primarily led by India's top developers. In 2022, a staggering total of over 4.02 lakh homes were successfully completed across the top 7 cities, marking the highest annual completions since 2017.

Chennai stands out with the highest project completion rate at 90%, while Kolkata trails behind with a completion rate of 70%. Notably, Chennai currently has the lowest available housing stock among the top 7 cities, with approximately 28,300 units available for sale. This disparity can be attributed to the delayed implementation of RERA in Kolkata, which wasn't enforced until late 2022. Additionally, when compared to other major cities, the real estate activity in Kolkata has remained relatively subdued, further contributing to its lower completion rate.

Reasons why some housing projects were not completed on time

Incomplete projects in urban areas can be attributed to a multitude of factors. Large-scale developments inherently require extended timelines, contributing to their incomplete status. Conversely, smaller developers often grapple with liquidity challenges and regulatory hurdles. Escalating input costs due to inflation worsen the situation, favouring financially robust developers who can keep progress on track.

Additionally, the construction sector has been significantly hampered by the pandemic's far-reaching effects. Lockdowns, supply chain disruptions, and labour shortages have collectively delayed projects, impacting developers of all sizes.