Slump in realty market leaves 85,000 houses unsold in Mumbai

  • Naresh Kamath, Hindustan Times
  • Updated: May 16, 2016 09:49 IST

The slowdown in the real estate market continues as the number of unsold apartments in Mumbai reaches a record 84,915 units.

This is assumed to be a big jump from 80,426 units unsold three months ago. Similarly, in the Mumbai Metropolitan Region (MMR) — including Mumbai, Thane, Navi Mumbai and Raigad — the unsold inventory is now 2.26 lakh houses against 2.09 lakh unsold units a quarter ago.

Experts believe that though the sale has marginally improved, the prices are still prohibitively high indicating the unaffordability in the market.

According to Pankaj Kapoor, the CEO of Liases Foras, the real estate research firm that compiled the report, “The builders have no alternative but to reduce prices. Buyers cannot afford present rates and hence are waiting for price correction. Even the government has played a spoiler by hiking ready reckoner rates and levying multiple taxes and premium reducing the scope for the builders to reduce the prices.”

The unsold inventory includes both the ready-made as well as the under-construction projects. Though builders agree to the slowdown, they call the figures highly exaggerated.

“Builders are now on a selling mode and even the sales have gradually improved. There is no way we can hoard such an inventory,” said Paras Gundecha, chairman and managing director, Gundecha Group.

Similar is the view of Rajesh Vardhan, the managing director of Vardhman Group, who said that at present builders are faced with tight monetary problem.

“There are negotiations taking place and we are giving the best possible deal by squeezing our margins. It is more of a buyers market,” said Vardhan.

The real estate industry in the past few years has been going through a tough phase. Builders jacked prices to exorbitant levels forcing many buyers to postpone their purchase plans. In addition, the Reserve Bank of India laid down stringent lending norms as well as hiked interests on home loans.

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