The upcoming Diwali festival is unlikely to bring cheer to the realty sector in Mumbai and the Mumbai Metropolitan Region (MMR), which is witnessing a massive slowdown.
Currently, the unsold stock in the MMR stands at 2.40 lakh units, while for Mumbai the figure has crossed 80,000. For years, Dussera, Gudi Padwa, Akshay Tritiya and Diwali are considered auspicious occasions to book apartments. However, with recession hitting the sector, the number of launches as well as sales has dipped significantly in the past few years.
Jones Lang LaSalle (JLL) India, a real estate consultancy firm, said affordability is still a prime issue. “The sales traditionally increase by up to 25-30% during the festive season. However, this year, we are not seeing more than 15-20% increase, as the sentiment is subdued and there is an affordability gap in the larger cities like Mumbai,” said Anuj Puri, and country head, JLL India.
Builders are coming up with various offers such as cash discounts, waiver in government taxes such as stamp duty and registration fees, free gold coins as well as flexible payment options.
According to Liases Foras, a real estate research firm, the huge inventory needs to be tackled. “Builders are trying their best to offload their stock by giving discounts and making various offers,” said Pankaj Kapoor, CEO, Liases Foras. Kapoor blamed the government for not taking steps to ease the situation. “The various premiums and taxes, along with ready reckoner rates, are so high that it has constrained the builders from reducing their prices,” said Kapoor.
Builders feel sales are a problem. “Buyers are waiting and as a result new launches have slowed down. We expect a boost in sales on Dhanteras,” said Vipul Shah, managing director, Parinee Group.