Homes delivered, but cash crunch stops buyers from moving in
For many buyers, the joy of receiving possession of their homes is fast turning to dismay as they cannot rustle up the finances for relocation – that too in cash. Some builders are citing demonetisation and the subsequent labour crunch as reasons for delay in projects.
Santosh Kumar, who received delivery of his Greater Noida West apartment earlier this month, says he cannot move in before April as he does not have cash for the movers and other expenses. His project is one of the many housing societies where even though 1,300 people have registered their apartments, only 500 people have moved in.
Shweta Bharti, general secretary, Noida Extension Flat Owners Welfare Association also confirms that some developers are citing demonetisation to justify the slowdown in work and late delivery of projects – but orally. No letters have been sent to buyers. “Whenever we visit the construction site and inquire about the progress in work, we are told that the cash crunch and lack of labour has delayed work,” says a buyer.
Out of 50,000 houses that were to be delivered by end of this year in Greater Noida West, only 12,000 have been handed over formally.
Unorganised labour from Bihar and Madhya Pradesh hired by developers on a short term basis have gone back to their states due to the cash crunch. Usually, a project site has 15% permanent labourers. About 85% temporary labourers. most of whom do not have bank accounts, have gone back. This has had an impact on project construction and led to delay in delivery of projects, says Praveen Jain, president of Naredco.
Am it Mo di, whole time director ABA Corp and vice president, Credai Wester n UP, says that there has been a 25%labour shortage. His company has taken the initiative to open bank accounts for workers and even decided to provide them daily meals.
“Builders were under pressure to complete projects before the real estate regulator is put in place across states and were hoping to complete them by February next year, but demonetisation will lead to further delays. If projects were delayed by a year to three years earlier, they will be further delayed by six months to a year due to cash flow issues,” Jain adds.