Mumbai: Fewer buyers, high rates keep realty sector down

Mumbai’s real estate sector has shown no signs of improvement, even with the new government in power, as the number of unsold apartments continue to rise.

Mumbai’s real estate sector has shown no signs of improvement, even with the new government in power, as the number of unsold apartments continue to rise.

In the city, 56,939 apartments remain unsold, a rise from 53,856 units in October 2014. In the Mumbai Metropolitan Region (MMR), unsold stock has gone up to 1.61 lakh apartments, from 1.48 lakh units three months ago. These include both ready and under-construction projects.

The trends were recorded during a survey by Liases Foras, a real estate research firm.

“Buyers cannot afford the current market rates, as prices have reached exorbitant levels,” said Pankaj Kapoor, CEO, Liases Foras. Kapoor said the multiple taxes and premiums from the state government are making matters worse.

Builders, however, felt these figures are exaggerated. “Builders cannot afford to hoard such a huge stock, considering the lack of liquidity in the realty market. Besides, ready flats are barely available, as they have many takers,” said Rajesh Vardhan, chairman and MD, Vardhman Builders.

Unless taxes are reduced, a single-window system is introduced and rules are eased, the current market rates will not come down, builders said.

The realty sector has been in a down phase the past few years. Prices have risen to record highs, forcing home buyers to push purchase plans. Further, the Reserve Bank of India is laying down stringent lending norms and increasing interests on home loans, which contribute to fewer people buying homes.