Recently, the real estate market in the National Capital Region (NCR) has witnessed cleanup and turnover. Now, a new crisis appears to have entered the market and accused of cheating and deceiving homebuyers on tour. Mint explain:
What is the latest controversy?
Last week, the Enforcement Bureau (ED) raided the NCR venues of two developers (WTC Group and Bhutani Infra) and their sponsors. The first information report submitted by the Economic Crime Department says deception, breach of trust and deception of hundreds of home buyers. The file is worth it ₹$35 billion was found to be collected from investors on NCR projects. Buyers were tempted to invest, but the money was allegedly sneaky and the project was not put into practice. The ED found file also shows transactions and transfers of assets between the two groups.
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Did NCR get hit by a scandal earlier?
Over the past decade, a series of real estate scandals have shocked NCR. Some of the largest developers in the region have been involved in years of unchecked real estate expansion, land frenzy, and transfers of funds from projects. Hundreds of home projects moved at the speed of a snail or were never delivered. However, this happened and things changed as customer demand revived after a long slowdown. Developers benefit from Bull Run and the return of investors. The well-known builder once again gained the confidence of the buyer. Now, the latest controversy opens a can of worms.
How did the two companies react to the ED raid?
Noida-based Bhutani has made a memorandum of understanding of the property transactions of the WTC. After the attack, Budani issued clarifications saying it cut all ties with the WTC in February and had no financial or operational ties. It says it is investigating and working with ED. The WTC group has not issued a clarification yet.
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What are the consequences?
On Tuesday, the World Trade Center Association (WTCA), which received the WTC brand, said it canceled 13 licenses held by WTC Noida Development and Spire Techpark due to multiple violations of its agreement. Termination applies to licenses held by Ahmedabad, Amritsar, Chandigarh, Faridabad, Gift City, Noida and others in WTC. WTCA said it found that WTC Noida development and Spire Techpark have “affected the reputation of the (WTC) brand.”
Does this affect market sentiment?
The two sponsors of M3M India, a developer of Gurugram, were arrested by ED in a money laundering case in 2023 before the Supreme Court gave them bail. This has not affected the confidence of the Gurugram market, investors or home buyers. Market analysts believe this is an event unlikely to change market dynamics. NCR has a lot of stressful projects despite this. While some are still stagnant, some are working on it. The situation is improving, but according to research firm Propequity, it is slow.
