Rajiv Mehrotra of Sunshine Properties said, "Small builders borrow money from banks who, however, disburse the amount in a phased manner. For example, when the first floor of a building is constructed, a certain percentage of the entire amount is given to the builder. But during this period, he has to pay high EMI on the loan amount. In addition, he has to bear the rising construction costs."

These hurdles put the development of the project in jeopardy. Even buyers pay only the token amount. This is not enough to complete construction work.

Pradeep Mishra, a Delhi-based real estate consultant says, "The cost of these floors in suburban areas like Indirapuram are lower than apartments in group housing societies that are being developed by big developers. This is probably the reason why several small brokers have become smalltime builders and contractors, but they have limited investment capability. So, they try to borrow money from local lenders and banks. The interest rates in both the cases are high."

But society developers have a different take on the fact that small builders are worst hit due to rising cost of construction and interest rates. As director of Landcraft Developers Manu Garg says, "The market of small builder floors and apartments are different. From the buyer's perspective, investing in a group housing project is safer than a builder floor. In a period of slowdown and liquidity crunch, the chance of survival of a big developer is more compared to a small builder."