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Unsold houses on the rise, but not getting cheaper

Year after year, the number of unsold flats in Mumbai city and the Mumbai metropolitan region (MMR) just keeps increasing. In Mumbai, 57,000 housing units of all types are unsold, while the number is 1.64 lakh in the MMR, reveals the latest survey carried out by real estate research firm Liases Foras.

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Year after year, the number of unsold flats in Mumbai city and the Mumbai metropolitan region (MMR) just keeps increasing. In Mumbai, 57,000 housing units of all types are unsold, while the number is 1.64 lakh in the MMR, reveals the latest survey carried out by real estate research firm Liases Foras.

This unsold stock is the reason why housing prices have stagnated, the research firm said, estimating the situation will remain the same for the next two years.

"The unsold stock rose by 17% in India. In the Mumbai Metropolitan region, which includes Thane, Kalyan and Navi Mumbai, this year 1.64 lakh housing units are unsold, against 1.48 lakh last year. In Mumbai, the unsold units are 57,000, against 48,000 in the previous year. The reason behind piling inventory is that more housing projects have been launched despite the declining sale of houses. Besides, the cost of property is still so high that the common man cannot afford to pay the Rs2 crore or 3 crore for a decent 2 BHK apartment in any ongoing project," said Pankaj Kapoor, managing director at Liases Foras.

Kapoor said there was little hope that property prices would come down. "There is little scope for the price correction because of the state government's increased taxes and 30% rise in the ready reckoner rate. The developer's input cost has gone up, so he cannot afford to cut the prices," said Kapoor.

Sunil Mantri, president of NAREDCO, the developer's umbrella body admitted that property sales dropped in the past three months.

Kapoor said that the decline in the housing sector has affected allied industries. "The real estate sector is having a cascading effect on other industries such as steel, cement, brick and labour. It will hamper our economic growth as well," Kapoor warned.

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