Slowdown Hits Mumbai’s Real Estate: Unsold Homes 80,000 or 1.13 Lakh, Which is Correct?


While the unsold residential stock in Mumbai has jumped dramatically, developers have stayed away from cutting prices in the low & medium housing segments. The slowdown has largely hit the luxury segment. 

Real estate consulting firm Knight Frank’s estimated 80,000 unsold houses under construction in the MMR (Mumbai Metropolitan Region) reveals South & Central Mumbai are the worst hit.
Mr. PranayVakil, Chairman, Knight Frank (India) said “Many projects in South Mumbai cost at least Rs. 3.5 crore. People buying flats here do not normally take housing loans. Since their ability to raise money has been hit, so has the sales of super luxury houses,”  

Mr. Pranay Vakil also said, ''In a slowdown  hit market, there are takers for units in the Rs. 25 lakh to Rs. 50 lakh price range. For instance, Navi Mumbai & Thane have less percentage of unsold stock. The unsold inventory of 80,000 houses forms 37%  of the total residential supply under construction in MMR."
Unsold Homes 1.13 lakh..!
A survey by real estate research agency LiasesForas puts the number of  unsold homes at 1.13 lakh.

Mr. Pankaj Kapoor, CEO, LiasesForas said, ''The developers can afford to hold on to their unrealistic rates as not much of their own equity is involved in the project. Developers make most of their money during pre-launches when 20 to 30% of the project is sold to private &  institutional investors. At this rate, what we will have is an inefficient market that remains in hibernation for 3 years with no change in prices. While developers have nothing to lose, they will eventually frustrate the investors and it is the capital that will lose”

Re - submit plans..!

MMCs (Mumbai Municipal Corporation’s) new DCRs (Development Control Rules) have upset the excess profit calculation of developers. about 3,000 projects have been asked to re-submit their plans. Developers have pre-sold their projects. Now, they would not be able to deliver on the promised large balconies.
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