KRERA update: Over 2,600 real estate projects delayed in Karnataka; Bengaluru worst hit
More than 2,600 real estate projects across Karnataka have missed their scheduled completion deadlines, with many now facing indefinite delays. Bengaluru is the worst-affected, accounting for 1,301 of these stalled developments. Additionally, 1,007 projects have applied for deadline extensions, which are currently under review, according to data from the Karnataka Real Estate Regulatory Authority (KRERA).
“The public is hereby informed that the project registration period for the following projects has expired and has yet to be renewed. The public is hereby warned that dealing with these projects would be at their own risk,” a message on the KRERA website said.
Also Read: Karnataka has over 2630 delayed real estate projects: KRERA
Why have real estate projects been delayed?
Regulatory hurdles remain one of the most common causes of project delays, experts say. Developers often struggle to obtain approvals and clearances from multiple government departments—including those related to environment, land use, and local municipal bodies. These processes can take months or even years, significantly pushing back timelines before construction even begins.
Financial constraints are another major reason behind stalled projects. Developers typically rely on customer advances and loans to fund construction. When sales slow or financing becomes difficult to secure, projects can come to a standstill. In many instances, funds are diverted to other ongoing developments, resulting in a cash crunch and further delays. This trend has become more pronounced in recent years, as several large real estate firms grapple with mounting debt and liquidity issues.
Poor planning and weak project management also contribute to delays. Some builders launch projects without conducting proper feasibility studies or miscalculate the costs and timelines involved, leading to execution challenges down the line, experts said.
Also Read: Strict compliance with RERA provisions crucial to restoring trust in housing sector: PM Modi
Karnataka developers owe homebuyers ₹667 crore in refunds
As of December 31, 2024, real estate developers in Karnataka owe homebuyers approximately ₹667 crore in refunds due to delays in handing over apartments. This figure comes from official records maintained by the Karnataka Real Estate Regulatory Authority (KRERA), as reviewed by HT.com.
According to the document, KRERA had approved 1,660 recovery claims amounting to ₹758.8 crore. However, refunds were successfully recovered in only 233 of those cases. This amounts to ₹91.8 crore—just 14% of the total value of recovery orders issued by the authority.
By the end of January 2024, pending recoveries from stalled real estate projects in Karnataka stood at over ₹486 crore. Over the following eleven months, that figure rose sharply—climbing by 37% to nearly ₹667 crore by December’s close.
