Realty research firm PropEquity today said completion of about 4.8 lakh residential units, scheduled by FY13, across the country are likely to be delayed due to increased project delivery commitments and escalating construction costs.

"It is estimated that 4,80,000 residential units across affordable, mid and luxury housing segments, scheduled for completion during FY13, will be delayed in the 11 cities," PropEquity said in its report - Timely Project Execution: A Key Challenge.

Out of these residential units, about 2.27 lakh are affordable houses, while 2.29 lakh comprise the mid-segment. The rest belong to the luxury housing segment, it added.

The report said there will be a negative impact on execution of projects due to increased delivery commitments and escalating input costs.

"Taking into account price increases in four key construction components, steel, cement, labour and bricks, there is an 18% gross increase in construction cost over the last two years [2011 over 2009]," the report said.

The study added that rising costs are impacting the companies' profit margins and hence developers are likely to lose interest in projects, resulting in delay in completion.

Besides, the commitments by the developers on new projects have increased many-fold than the actual delivery happening on the field and it will also lead to delays in giving possessions of houses.

"In 7 of the 11 cities studied, the commitments made by developers with respect to project delivery during FY13, show a more than two-fold increase over the last 3 years [2011-13 as compared with 2008-10]," PropEquity said.

The study covered 11 locations; Gurgaon, Noida, Greater Noida, Mumbai, Navi Mumbai, Thane, Pune, Bangalore, Chennai, Hyderabad and Kolkata.