77,000 yet to be sold; annual household income of an average citizen is Rs 7.5 lakh
77,000 yet to be sold; annual household income of an average citizen is Rs 7.5 lakh It seems apartments in the Mumbai Metropolitan Region (MMR) are not turning out to be affordable for potential home buyers. According to a report by JLL India, a real estate consultant, 70 per cent of the total unsold apartments in the MMR region are priced at Rs1 crore or above.
There are 77,000 unsold apartments in the MMR region and it may take more than three years to clear the unsold inventory as only 3.5 per cent of it is in the ready to move-in category, stated the JLL report.
“There has to be a proper study conducted and nowadays there is a trend that developers hire private consultants to study the consumer behaviour and actually understand what is the market demanding and what actually are we required to supply. I
have experimented this and also hired an agency to understand the demand and supply ratio. There cannot be a supply of a 2 BHK or 3 BHK when the actual demand is that of a 1 BHK,” said Arvind Goel, president, Maharashtra Chamber of Housing Industry (MCHI) Navi Mumbai.
The report further stated, “This situation cannot be changed overnight, as the developers began these expensive projects in response to a then thriving economy, anticipating a robust demand. It is because of the economic slowdown over the past two years that put a hold to the unsold projects.”
“We cannot reduce the price overnight just because it should be affordable because the cost of construction, prices of land also increases with the increase of Floor Space Index (FSI). It is a misconception that with increases FSI the rates decrease. What happens is totally the opposite because if FSI is increase the land of cost is also increase and this indirectly affects buyers as the prices of apartments increases,” said Prakash Baviskar, member, Navi Mumbai Airport Influence Notified Area (NAINA) Builders Association.
The JLL report also said, in percentage terms, there has been a price reduction to the tune of approximately 0.95 per cent in MMR and 3.25 per cent in Mumbai. The average per-square-foot has reduced from Rs13,020 to Rs 12, 896 in MMR, while in Mumbai it has dropped down to Rs 19,681 from '20,125.
Meanwhile, Ashwinder Raj Singh, CEO – Residential Services, JLL India, said, The options are clear — either wait for the economy to grow and buyers to be more comfortable with paying high prices, or resort to discounts and innovative financial structuring to catalyse sales, recover investment and bring in liquidity for further projects.
