The real estate market in the Mumbai Metropolitan Region (MMR) has yet not picked up pace as the number of unsold apartments rose to a staggering 2.55 lakh units from 2.46 lakh three months back.
The reason — demonetisation coupled with lack of affordability for the buyers — has adversely affected the realty sector.
This figure includes houses of both the ready as well as under-construction projects.
Liases Foras, the real estate research firm which compiled the data, said in the period of October-December 2016, demonetisation played a major spoilsport. “After November, the sales dropped drastically and brought the entire realty sector to a grinding halt. Both sales and launches came down drastically,” said Pankaj Kapoor, CEO, Liases Foras.
The number of launches during this period also came down drastically to 8,000 from 14,000 which were the figures in the period of July-September, 2016.
Kapoor says the market conditions would improve if the builders reduce prices and also the interest rates on home loans come down.
Builders, however, have described the figures as highly exaggerated. “It is true that sales took a hit but this figure is simply not possible. Builders cant afford to have such a huge inventory,” said Bhavesh Sanghrajka, chairman and managing director of Shraddha Lifescapes.
The real estate industry in the last few years has been going through a recessionary phase. Builders raised realty prices to unaffordable levels forcing many buyers to postpone their plans to purchase. In addition, the Reserve Bank of India (RBI) as a cautionary exercise laid down stringent lending norms as well hiked interest rates on home loans further aggravating their plans. However, the interest rates on home loans are coming down gradually.
Why is the inventory increasing by the day?
Exorbitant Prices: Builders have jacked prices to exorbitantly making houses unaffordable
Multiple taxes: The government loaded the realty sector with multiple taxes like service tax, stamp duty as well as premiums which only reduced the scope of the builders to cut prices
Stringent home loans rules as well as high interest rates: The Reserve Bank of India has imposed stringent lending conditions to avail the home loan as well as prohibitively high interest rates on them.