Buyer complaints on endless delays in project/property handover is now commonplace. There are enough number of cases where delays range from a mere 3 months to 1.5 years in some cases with no firm commitments. True, builders have been caught on the wrong foot by recession but that hardly justifies the concerns of buyers. Real estate in Cochin, Real estate in Calicut and Real estate in Trivandrum have been the worst hit in Kerala.
One major reason has been that many builders went on a land buying spree during the real-estate hey days and paid big rupee for creation of land banks on the assumption that the market is uni-directional. They over stretched and over leveraged in their rush to acquire properties. Money from launched projects were first diverted into this act in the hope that the cash cycle would take care of itself. With the market crash, builders including many of the big ones found themselves with huge assets and dismal cash flow. The only option was to sell some of those assets at hugely discounted values which is what some of them have been forced to do.
Invariably, all builders have delayed projects testing the patience of many a buyer. Remember, a lot many of these buyers paid a premium during the boom to book properties and if they were to sell it today it is likely to be at a loss. Many of these buyers have taken finance and this is a cost which they have to bear for no fault of theirs. Opportunity loss in terms of rentals is also to be considered. Of course the fine print on the contract provisions for nominal compensation from the builder but would that suffice?