As many as 84,915 flats find no takers in Greater Mumbai, while in MMR the figure is a whopping 2.26 lakh
There are around 2.26 lakh apartments in Mumbai Metropolitan Region and around 85,000 flats in the Greater Bombay that have remained unsold in 2015-16, said Mumbai-based property research firm Liases Foras.
According to developers, the input costs, including the land, construction, premium of the project are so high that even if they want to reduce the prices, they are unable to do it. "We are now applying a different model to increase the sale. We are focusing on the volume of the sale rather than the selling only a few apartments at a high cost," said Boman Irani, chairman of Rustomjee Group.
The report on unsold apartments released by Liases Foras said: "This year the unsold flats in MMR is 2.26 lakh against 2 lakh in 2014-2015, while in Greater Mumbai, the unsold flats are 84,915 against 80,425 in 2014-2015. Year to year, the unsold flat inventory has gone up by 31 per cent, while the quarter to quarter inventory is seven per cent."
Pankaj Kapoor, MD at Liases Foras, said that the price is a major factor, piling the unsold apartments in Mumbai and its peripheral areas. "Due to high prices, the sale of properties has affected badly. There is negligible sale because the property prices have not increased significantly in last one year. There is only marginal rise and this situation will prevail for the next year and so," Kapoor said.
He said that there is a need for 18 crore houses in India and eight crore in major metropolitan cities. "However, the prices of the apartment are keeping the people away even though they want to buy their dream home. The sale is down therefore the unsold inventory is rising. In MMR, 44,000 housing units were sold this year against the huge demand of the houses that resulting rising into the unsold inventory," Kapoor added.
Prime Minister Narendra Modi has been talking about "Housing for All", but there is no on ground plan. "In fact, the government is not permitting developers to reduce the property rates. Each year government has been imposing various taxes and government rates. That has made buying houses unaffordable and a distance dream for the common man," said a property expert. He added that the developers had little margin so they do not want to go further down and people have no money to buy the house.
"This deadlock will be resolved when people's income go up. If the prices are reduced, then there are the chances of property sale going up," hinted Kapoor. However, builders have a different take on this.
Irani said that the government should take initiative to reduce the prices by slashing taxes. "The reality is that the prices are not going up. Even dropping prices is not sustainable for the developers because of high input cost. Why should I be sell a property that is not going to benefit me?" asked Irani.
Another developer said that they are ready to drop the prices but where are the customers. "I had reduced almost 15% prices in some of my project still there are no buyers in market. How much can I do more. I cannot sell the property by making loss," he said requested anonymity.
Ravi Patil, a developer from Navi Mumbai, said that the sale is happening but it is the Rs50 lakh and less worth house brackets. "It is true that there is stagnancy but we are hopeful of the growth once the various on-going infrastructure projects get completed," he said.
Niranjan Hiranandani, chairman of Hiranandani Group, said that there is hesitation in the market but the sale is satisfactory. "Currently the market is vibrant and there is significant appreciation as well. However, with the arrival of monsoon, the sale will surely pick up," Hiranandani added.
Gujarat witnesses positive trend
In terms of sale and property appreciation Gujarat is way ahead than Maharashtra. Ahmedabad has witnessed 32% rise in the property sales while in Mumbai it has been only 12%. Pricing in Ahmedabad has registered 12% rise while Mumbai property prices are stagnant. Property market in Pune is also on a slow down and as a result its unsold inventory has increased by 43% this year.
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