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Over 1,626 stalled housing projects and 4.32 lakh incomplete homes have trapped Rs 10.8 lakh crore, causing distress for buyers, developers, banks, and impacting the wider economy
IRL Money co-founder Vijay Mantri has cautioned that as many as 4.32 lakh incomplete homes have locked up a staggering Rs 10.8 lakh crore. (Representational Image)
The dream of owning a home has turned into a nightmare for thousands of buyers across major cities in the country. What was once a passion-driven rush into real estate is now snowballing into an economic crisis for the middle class, with ripple effects threatening the wider economy.
A report by Business Today revealed the alarming scale of the problem with 1,626 housing projects across the country remaining stalled. IRL Money co-founder Vijay Mantri has cautioned that as many as 4.32 lakh incomplete homes have locked up a staggering Rs 10.8 lakh crore. Calculated at an average value of Rs 2.5 crore per house, the numbers highlight the gravity of the situation.
For many families, the struggle is twofold. Those who financed their purchase with bank loans are trapped in a cycle of paying monthly EMIs while simultaneously bearing the cost of rent. Developers, on the other hand, are reeling under severe cash-flow shortages, making it nearly impossible to finish projects on time. As deadlines keep slipping, confidence among buyers is collapsing further.
Banks and non-banking finance companies (NBFCs) are also under strain. Instead of pressuring builders, lenders often lean on buyers to recover dues, adding to their distress.
The slowdown in real estate is already spilling into other sectors. Employment in construction is shrinking, demand for allied industries such as cement and steel is falling, and investor sentiment is weakening.
According to Vijay Mantri, “the headline price i.e. the prices visible in the market may remain stable, but the actual price is continuously falling due to discounts and delays.” While on paper the real estate market appears steady, the reality is a sector weighed down by hidden losses and eroding value. This imbalance is straining both buyers’ wallets and the overall health of the economy.
What Can Homebuyers Do?
Experts suggest that buyers must tread carefully in the current environment. The first rule, they say, is to avoid investing in incomplete or pre-launch projects. Instead, focus should be on properties registered under RERA and nearing completion.
Transparency is crucial – buyers should insist on clear payment schedules tied to construction milestones and demand escrow account reports to ensure funds are not diverted. Financial caution is equally important: do not overstretch by taking excessive loans and maintain a cash buffer equivalent to 12-18 months of expenses.
Finally, experts advice against putting all savings into real estate. Diversifying into other regulated investments can offer stability and reduce risk.
September 08, 2025, 18:22 IST
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