The number of unsold flats in Mumbai has shot up to 25,000 in the last one year as property rates have gone through the roof, a survey has revealed.
The survey of 2,400 realty projects, conducted by real estate research firm Liasas Foras, says there were 16,500 unsold flats in the city in 2009, and the rise in numbers indicates that buyers may continue to stay away from the market till prices ease.
In the entire Mumbai Metrop-olitan Region (MMR), which, apart from the city, includes areas such as Navi Mumbai, Thane and Mira-Bhayander, there are no takers for 88,000 flats as of now. This figure, too, is a jump from 68,000 in 2009.
Sales in the city from October to December 2010 dropped to 1,900 from 2,600 for the corresponding period in 2009.
Property prices in the city went up by as much as 40% last year. They have now reached such levels that there are few flats costing less than Rs 1 crore. Even distant suburbs such as Mulund and Borivli command very high rates, making housing unaffordable for the middle-class.
Pankaj Kapoor, CEO of Liasas Foras, attributed the pile-up of properties to this steep increase in rates. “Buyers can no longer afford to buy on the basis of prices quoted by builders. They are waiting for prices to decrease.”
That may happen as banks ask builders for repayment of loans even as flats remain unsold.
“Many developers would reduce prices in the coming months,” said Anand Gupta, secretary, Builders Association of India, one of the premier organisations of builders.
Discount offers are already being made. Sandeep Reddy, founder of Groffr.com, a website that offers discounts, said, “Builders are giving discounts but after a lot of haggling. Prices will come down in the coming months.”
But MHADA’s sale of 6,000 low-cost houses in May could still be a dampener for the industry. MHADA flats cost less than half of what private builders charge, and the cost is calculated on the basis of carpet area, not super built-up (which builders go by), an added incentive for buyers.
According to Kapoor, factors like the tightening of lending norms by banks, higher EMIs as well as high costs of living have also contributed to buyers putting off their purchase plans.