Realty check: 53% homes built in metros since '07 unsold

Apartments

More than half the houses built in six major cities over the last two years are lying unsold, estimates a leading real estate research agency.

Just about 3.86 lakh homes out of the 8.21 lakh built in the last two years in the Mumbai Metropolitan Region (Mumbai, Thane and Navi Mumbai), National Capital Region (Delhi, Faridabad, Gurgaon, Noida, Greater Noida and Ghaziabad ), Bangalore, Chennai, Hyderabad and Pune found buyers, says a report by the Mumbai-based Liases Foras. The agency surveyed 5,810 new residential projects in these cities in December and January.

The 53 per cent unsold inventory (4.35 lakh homes) translates into no takers for 50 crore sq ft of a total 94 crore sq ft of living space. Pankaj Kapoor, CEO of Liases Foras, said the inventory of unsold houses across cities has doubled over the past year. In Mumbai, it has increased nearly five times between 2006 and 2009 from 1.68 lakh sq ft to 8.08 lakh sq ft.

Kapoor attributed the absence of buyers to the mismatch between prices and affordibility. According to the report, prices started to go up in 2006, when supply was limited. Over the next two years, they shot through the roof as money poured into real estate firms from IPOs, FDI and cash-laden investors. Stocks piled up as developers shifted focus from selling homes to getting financial valuations done to attract more investment.

This, Kapoor said, is evident from the fact that Chennai, which has a conservative realty market with little involvement of equity players, has only 42 per cent unsold flats less than Mumbai and Delhi and the IT hubs of Bangalore, Pune and Hyderabad, where over 50 per cent of the stock remains unsold.

The supply glut, and the fact that investors and private equity firms are largely out of the realty market, signals good times for buyers, the report says. Firms like DLF have announced price cuts ranging from 18 per cent (Chennai) to 30 per cent (Bangalore).

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on indianexpress.com are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, indianexpress.com reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.