Homeowners roll up sleeves to complete unfinished flats in India

Homeowners are gearing up to complete their flats which have remained unfinished since a long time now. People from all walks of life have turned into amateur developers and are trying to complete the remaining work in cases where the actual developer has gone bust. There are numerous people who are going through the same situation and they have now become desperate to complete the work on the property where they have spent lakhs of rupees. There are thousands of projects across the country which is facing the problem of non-completion leading the homeowners to suffer the most.

An analysis conducted on approx. 11,000 home builders by research firm LiasesForas in February, has revealed that developers on average have to repay twice as much in debt each year as the income they generate.The property prices in India’s biggest cities are declining, in Mumbai home values have sunk 11% last year following a 5% decline in 2017.

The homeowner-developer relationship

Homeowners have now become eager to complete the pending or delayed real estate projects all by themselves. With a number of developers becoming bankrupt, it has become difficult for them to complete the projects due to an ongoing fund crunch.

• The faith of the homeowners on the developers has weakened over time. Due to the increasing numbers if unfinished flats, buyers have lost their faith in under construction properties. And as a result, people these days are interested more in buying finished properties which is becoming a problem for the developers as they are finding it tough to get outside funds to complete the building.
• Homeowners have come together as a band now and they are trying to complete the project which has become quite a tedious task. This is not only exhausting but is also taking away a lot of their time. High-rise buildings have been left deserted by the developers and now the buyers are trying to complete the same in the best possible ways.
• With so many increasing cases of the developers not being able to complete the development, the home-owners have now become reluctant to hand over cash deposit to them. This has led the funding prospects of the developers to look bleak and this has led many of the companies to go into an insolvency state.

It was found that the fault mainly lied with the developers as they were not able to evaluate the situation and ended up making a bad investment decision. Taking up of small term loans for long term investment also affected their funds and the regulatory changes also contributed to the misery.

The only hope that lies now with the homeowners is the fact that after completion of the project, the property would gain due to the accelerating conditions of the real estate market. A number of buyers have invested their life savings in real estate with the expectation to gain the perfect space, and now they will have to take additional loans to complete them.