The unsold housing stock has been rising due to the unaffordable property prices. In Mumbai, Delhi and their periphery, there are around five lakh unsold houses registered this year according to the recently released Liasas Foras report. According to the property research firm, there was a 17% rise in unsold housing stock in tier one cities. “Mumbai and Delhi has more than five lakh unsold houses, followed by Bengaluru and Pune. The unsold housing stock growth is 2% every quarter. The rise in unsold inventory is due to existing stock and new launches, as a result of which, the property prices haven’t increased significantly.”
Pankaj Kapoor, MD, Liases Foras said that due to the unsold stock, the developers are now focusing on the small ticket houses. “Developers now want to dispose of the existing units rather than adding to it. Also, the Real Estate regulatory Act (RERA) is about to come in force and developers do not want to take any risk. RERA can change the housing sector dynamics. Therefore, developers are taking time until the final decision of it’s implementation is taken,” he said.
Kapoor also said that, today the developers are in a dilemma, caught between reducing the prices or holding the stock further. “The cost of land is the major factor in the property price rise. To make houses affordable, the cost of land has to be reduced. Besides, the government is increasing and imposing more taxes each year. The sector is relying on the increase in income of the buyers to bridge this gap, so they are in a better position to make the purchase at current market rates. Given these factors, this situation might prevail for yet another year,” Kapoor added.
As per the report, the prices across all major cities have remained stable. Minor growth was observed in Bengaluru, Chennai and Hyderabad while the rest of the metro cities like Mumbai and Delhi witnessed average price levels.
Manohar Shroff, developer and property agent said that there is sale in the affordable housing segment but the luxury segment is in a lull. “The housing prices are way above the purchasing power of the buyers. We hope that the market will revive in Diwali. Also, monsoon was good this year, which might augment the income of the buyers,” Shroff added.
Anand Gupta, another developer said that the government is responsible for this condition of the sector. “There is no planning and the approval process is not stream lined. We are still awaiting the Development Plan 2030 and the Real Estate (Regulation and Development) Act, 2016. The confusion in our sector also has adversely affected the sale of houses,” Gupta added.