Realty crisis: 108K units remain unsold in Mumbai

The real estate sector continues to stagnate in Mumbai as a staggering 108,929 housing units remain unsold in the city
HT Image
HT Image
Published on Apr 28, 2021 01:03 AM IST
Copy Link

The real estate sector continues to stagnate in Mumbai as a staggering 108,929 housing units remain unsold in the city.

From January to March, 6,780 housing units were launched in Mumbai, of which 5,775 houses were sold.

As an average of 1,908 housing units is sold every month in Mumbai, it will take at least 57 months to sell its unsold inventory, according to a study conducted by real estate research firm Liases Foras, which pointed out the realty sector’s grim situation, especially amid the second wave of Covid-19 lockdown, where the entire sector has been paralysed.

In any realty market, the ideal inventory should not be above 15-20 months.

According to Pankaj Kapoor, managing director, Liases Foras, this huge inventory is a cause of worry.

“The second wave of Covid-19 will only make things difficult for the real estate sector as the sales volume will decrease significantly,” said Kapoor, adding, “In addition, the state government has made things more difficult by withdrawing the stamp duty cut in March-end. The stamp duty cut had helped drive the sales in the past few months,” he added.

The Builders’ Association of India (BAI) said both slowdown and government policies have caused havoc in the realty sector, resulting in the piling up of such a huge inventory.

“There was an economic slowdown in the past few years which slowed down our sales considerably. In addition to it, the government levied huge premiums and taxes, forcing us to hike the real estate prices, which drove homebuyers away from the market,” said Anand Gupta, chairman, BAI (housing and RERA committee).

“Just as things were looking up, the second Covid-19 wave and the subsequent lockdown again dissuaded homebuyers from buying properties,” he added.

The Mumbai Metropolitan Region (MMR) region, which along with Mumbai includes Navi Mumbai, Thane and Raigad, also has an unsold inventory of 286,992 units. It will take at least 48 months to clear MMR’s inventory, given that approximately 6,000 units are sold monthly.

Paras Gundecha, founder of Gundecha Group – one of the leading real estate firms – said that the coming days may not be good for the realty sector.

“The real estate sector is driven by sentiments, and currently we are witnessing a negative sentiment all across. We will face difficult times in the coming days due to the Covid-19 wave, and for this, the government needs to give us incentives like re-imposing the stamp duty cut,” said Gundecha.

The real estate industry in the past 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. However last year, the Covid-19 pandemic caused an upheaval in realty market, with sales plummeting considerably. Last August, the government announced its decision to reduce stamp duty levied on sales of apartments to 2% from September 1 to December 31, 2020, and then hike it to 3% from January 1 till March 31, 2021. The move had played a huge role in boosting sales of both primary and secondary market. However, after March end, the government refused to extend this scheme despite the real estate sector’s plea. The second wave of Covid-19 then hit the country, bringing more distress for the sector.


    Naresh is a Special Correspondent with Hindustan Times, Mumbai, since 2005. He covers the real estate sector, in addition to doing political reportage.

Close Story

Less time to read?

Try Quickreads

  • Former Karnataka chief minister H D Kumaraswamy. (HT File)

    BJP is "Kamdhenu" for business class, says HD Kumaraswamy

    Former Karnataka Chief Minister and Janata Dal (S) leader HD Kumaraswamy attacked the Bharatiya Janata Party, saying that it is a "Kamadhenu" for the business class and "bloodthirsty" for the poor. "BJP means price rise, price rise means BJP. BJP is a "Kamadhenu" for Business Class and bloodthirsty for poor," Kumaraswamy said in a tweet.

  • The accused had multiple cases filed against him and was arrested by police in Belagavi district.

    'Accused cannot be handcuffed without reason': Karnataka high court

    The Karnataka high court has awarded compensation of 2 lakh to an accused who was handcuffed and paraded by police in Belagavi district, news agency PTI reported. The court said, "An accused who is arrested can normally not be handcuffed." The court even asked the director-general of police to consider using body cameras to record the manner of arrests henceforth. Divate, who had a dispute with another person approached the court and sought compensation of 25 lakh.

  • Locals, the officers said, help a great deal when they go on raids. 

    Case File | The Capital's A-Team to arrest ‘Proclaimed Offenders’

    On September 3 in 1997, a murder was reported in Northeast Delhi's Gokulpuri. The next year, the man identified as Raj Kumar — then 25 — was declared a proclaimed offender (POs). Twenty years later in 2017, while riding a rickshaw in the lanes of Uttar Pradesh's Banda district, Raj Kumar was caught and arrested. Once declared as a proclaimed offender by the court, the person can be arrested at any time.

  • The incident has been recorded in the CCTV cameras installed in the hotel after which police arrested the accused on Tuesday. (REPRESENTATIVE PHOTO)

    Ex-Inspector General of Police's son murdered in Pune, five held

    Pune police have arrested five persons for murdering a 33-year-old man at Ambegaon Budruk. The victim Narendra Raghunath Khaire (33), has been identified as the son of former Inspector General of Police Raghunath Khaire. The incident took place on June 26, when the victim was brutally beaten up by the accused persons over a brawl about two-wheeler parking. Narendra, who was an HR manager in a private company, was in a hotel on June 26.

  • Delhi CM Arvind Kejriwal (HT PHOTO.)

    Delhi govt to procure 1,950 buses soon; 11,000 buses in city by 2024: Kejriwal

    The Delhi government will procure 1,950 buses and issue fresh tenders for another 4,800 buses, taking the fleet to over 11,000 on the capital's roads by December 2024, Chief Minister Arvind Kejriwal on Wednesday. He also said the Delhi government has decided to extend the free ration scheme till September 30. The chief minister said his government will hire experts to roll out its urban farming initiative that was announced in the budget.

Story Saved
Saved Articles
My Reads
Sign out
New Delhi 0C
Wednesday, June 29, 2022