Prices beyond reach, Unsold apartments in Mumbai climb up to 1.09 lakh
Research firm blames unaffordability, builders say it’s note ban, GST, RERA effectmumbai Updated: Mar 21, 2018 15:57 IST
The real estate slowdown still continues as the number of unsold apartments in Mumbai has now reached 1.09 lakh units, which is a record of sorts in the realty sector.
The reason: unaffordability, as homebuyers are finding it difficult to purchase as they feel the rates are still beyond their reach. Liases Foras, the real estate research firm which compiled the data, said that despite price cuts and incentives, buyers are not in a positionto buy.
“The singular reason for this state is unaffordability. People want to buy but are not able to due to pricing,” said Pankaj Kapoor, CEO, Liases Foras.
In addition, the Mumbai Metropolition Region (MMR) saw the number of unsold apartments reach 2.60 lakh.
Kapoor also blamed the government for this impasse. “The government talks of affordable housing but levies heavy taxes and premiums on realty sector. The entire burden in ultimately borne by the buyer,” said Kapoor.
Most of these unsold houses are in the Western suburbs (49,462 units), followed by Central suburbs with 44,230 units and finally the Island city, which has 15,945 houses.
These include houses of both the ready as well as under-construction projects.
Builders, though, disputing the number of unsold inventory claimed that the coming days will see substantial reduction in them. Dharmesh Jain, chairman and managing director, Nirmal Lifestyle, attributed the unsold inventory to the structural changes in the last one-and-a-half years. “The real estate sector has undergone lots of changes like RERA (Real Estate Regulatory Authority), demonetisation and GST, which has led to a slowdown in the overall construction scenario.” Similarly Manju Yagnik, vice-chairperson, Nahar Group, said there is now positive sentiment in the market. “Buyers are now taking a plunge and we expect good sales in the next few months,” said Yagnik.
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. It also hiked interest rates on home loans, further upsetting homebuyers’ plans. The demonetisation and introduction of the Goods and Services Tax (GST) complicated matters for the industry. On the other hand, with an element of uncertainty due to economic slowdown, buyers too were not willing to take the risk of taking huge housing loans.
However, both the prices as well as the interest rates on home loans are coming down gradually and the industry is hoping that things will improve.