Hi All,

I had bought in an under construction project in Mumbai in Oct 2010 and the builder promised possession by 2013, but seeing the pace of the project it seems like it is gonna be delayed by atleast a year. Seems like this is the condition all over mumbai? What do you guys think is the reason for this? - Late BMC approvals, policy paralysis, no demand or what else? Can we have a discussion on this to analyse what is the problem?
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  • one of the problem is cashflow because of investors. Most of these uc projects when launched are already 50 to 60% sold.. which is usually by investors. Investors have a fixed capital outlay and exit at certain stages to make their money. Usually they do not bring in regular cashflows which is done by suckers at the end of the chain which is end users.
    If the suckers refuse to bite the bait, because of the price, investors can't exit means no regular cash flow.

    Builders are not being financed by banks or QE or whatever.. funds have dried off and cash is tight

    Delays are also due to cyclical factors which keep occurring once a while with shortage of sand, cement etc

    Builders over estimate their capability and underestimate the effort involved

    Delay by various authorities to give approvals.. AAI, Fire brigade, BMC, etc etc.. causes havoc..

    There is simply no one good reason.. but too many of them..

    Originally Posted by AyaanD
    Hi All,

    I had bought in an under construction project in Mumbai in Oct 2010 and the builder promised possession by 2013, but seeing the pace of the project it seems like it is gonna be delayed by atleast a year. Seems like this is the condition all over mumbai? What do you guys think is the reason for this? - Late BMC approvals, policy paralysis, no demand or what else? Can we have a discussion on this to analyse what is the problem?
    CommentQuote
  • cash flow

    Originally Posted by Sharpj
    one of the problem is cashflow because of investors. Most of these uc projects when launched are already 50 to 60% sold.. which is usually by investors. Investors have a fixed capital outlay and exit at certain stages to make their money. Usually they do not bring in regular cashflows which is done by suckers at the end of the chain which is end users.
    If the suckers refuse to bite the bait, because of the price, investors can't exit means no regular cash flow.

    Builders are not being financed by banks or QE or whatever.. funds have dried off and cash is tight

    Delays are also due to cyclical factors which keep occurring once a while with shortage of sand, cement etc

    Builders over estimate their capability and underestimate the effort involved

    Delay by various authorities to give approvals.. AAI, Fire brigade, BMC, etc etc.. causes havoc..

    There is simply no one good reason.. but too many of them..



    All other delays can be managed . But as you said, cash flow is the main spoiler. The end user ran away from the market. So the investors stuck with the overpriced inventory. No takers.

    Because of this investor manipulation, genuine end users too are stuck because the projects are delayed ( ?). One wonder, will they ever be completed ? I mean where will they raise the funds to complete the projects ?
    CommentQuote
  • Originally Posted by AyaanD
    Hi All,

    I had bought in an under construction project in Mumbai in Oct 2010 and the builder promised possession by 2013, but seeing the pace of the project it seems like it is gonna be delayed by atleast a year. Seems like this is the condition all over mumbai? What do you guys think is the reason for this? - Late BMC approvals, policy paralysis, no demand or what else? Can we have a discussion on this to analyse what is the problem?

    Constructiion activity has come to a grinding halt all over India. Builders just start the construction work and than deploy the money in selling another project. Again they collect money and start a totally fresh project. In the 6 major cities in India, only 4% projects which were started in 2008 are ready today, and 59% projects which were started in 2007 are ready today. Projects which are launched today will either be ready in 2017-18, or many of the projects will be shelved
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  • Construction activity is not come to a grinding halt. But i read somewhere that from April 16 it will happen all over India as they have many demands from the Government.
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