Mumbai realty: Where have all the buyers gone?

Incomplete projects and unaffordable prices are putting off prospective home buyers, a new report says
Only 3.35 per cent of the total unsold inventory of 77,460 residential units have been completed in the Mumbai Metropolitan region, a study done by property consultant JLL and real estate body Credai said.

While only 1.1 per cent of the total unsold units in Mumbai are ready for possession, it is 1.3 per cent in Thane.

In Navi Mumbai, this proportion is higher at 8.1 per cent.

Data show while 18 per cent of buyers bought houses in the launch phase, 27 per cent bought houses nearing completion.

Even after completion, it takes developers at least two quarters to sell the remaining inventory.

“The sluggish sales could also be due to most of these 2,600 units being priced above Rs 1 crore (Rs 10 million), an unaffordable range for many end-users,” said Ashutosh Limaye, head of research at JLL.

Both factors have pushed inventory overhang in Mumbai (including Thane and Navi Mumbai) to more than 30 months, he said.

While developers might think the ticket sizes offered by them are justified, the market seems to differ.

While suburbs from Vile Parle to Goregaon have 205 completed-yet-unsold units in the range of Rs 2 crore (Rs 20 million) and above, a major chunk of the unsold units are concentrated in Navi Mumbai.

More over, units priced below Rs 65 lakh (Rs 6.5 million) are situated in emerging areas of Navi Mumbai like Ulwe, Karanjade, Dronagiri, or on the far-away stretches off Ghodbunder Road in Thane, JLL said.

“It also goes to show how buyers prefer to buy into completed  projects. Also, the market has become largely end-user-driven and investors no longer park funds in residential real estate, as the high returns it was once known for have considerably diminished,” Limaye said.

Image: A Mumbai highrise. Photograph: Punit Paranjpe/Reuters

The image is used for representational purpose only