The time difference between launch and completion of residential projects between 2014 and June 2024 has reduced by around 20 percent to 4.9 years across seven major housing markets, compared to projects that began between 2010 and 2019, according to a report.
However, even after a 10 percent drop in time taken, properties launched in Kolkata between 2014 and Jan-June 2024 saw an average of 5.7 years for project completion, a report from the real estate consultancy Anarock showed.
The launch-to-completion timeline for housing projects between 2010 and 2019 was 6.1 years across the top seven markets, which includes the Mumbai metropolitan region, National Capital Region, Chennai, Kolkata, Bengaluru, Pune, and Hyderabad, the report added. The same for Kolkata, during that period, was at 6.3 years.
In major markets such as the Mumbai metropolitan region, the construction timeline from 2014 to Jan-June 2024 declined to 5.2 years, against 6.5 years in projects from 2010 to 2019, according to the report. For the National Capital Region, which had been beset with issues such as errant and financially insolvent developers, the construction timeline was down to 5.4 years for projects launched between 2014 and first half of 2024 , compared to 7.2 years in the 2010-2019 period.
For projects of the size of 100 to 500 units, the launch-to-completion time from 2014 to June 2024 was 4 years on a pan-India basis, an improvement over 4.9 years taken for projects launched and completed between 2010 and 2019.
In a statement to Moneycontrol, Anarock's chairman Anuj Puri said that the notification and subsequent operationalisation of the Real Estate (Regulation and Development) Act, 2016, and the subsequent state-level Real Estate Regulatory Authorities played a major part in speeding projects up, with a market consolidation towards larger developers also playing its part.
"RERA has had a direct impact on the reduced construction timelines in Indian real estate. Strict provisions, penalties for delays, and escrow accounts have led to improved project completion. Large developers’ market share and transparency further contribute to shorter construction times," Puri said in the statement.
Conversely, West Bengal's chequered history with the Act may have also contributed to the state lagging behind its peers when it comes to project completion timelines. The Mamata Banerjee-led TMC government established its own real estate regulatory mechanism, the West Bengal Housing Industry Regulatory Act, or WBHIRA, as a substitute to the Central law. In May 2021, the Supreme Court struck down WBHIRA, deeming the legislation unconstitutional, after a homebuyers' rights group filed a petition against the law.
After a regulatory vacuum of nearly 18 months in the sector, the West Bengal government finally operationalised the West Bengal Real Estate Regulatory Authority, or WBRERA, in December 2022, although more rules and allied infrastructure, such as the WBRERA website, were put in place in the weeks and months following.
According to Saket Mohta, managing director of Kolkata-based developer Merlin Group, the transition from WBHIRA to WBRERA may have led to some delays across projects in the Kolkata market. He added that other factors, such as a relatively low margin for developers, as well as labour shortages due to various festivals, could have added to the delays.
"In Kolkata, the sale price of a project is much lower compared to other cities, though the construction costs are more or less the same. As a result, developers in other cities can use construction equipment more liberally. In contrast, developers in Kolkata sometimes need more time to complete projects...Moreover, construction timelines in Kolkata often face delays due to several factors. The complexity of city planning, with a mix of old and new structures, makes it challenging to navigate construction projects”, Mohta said.
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