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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).
“Battling mounting debts, developers are left with little option but to find end-users to sell their flats. The gap between affordability and pricing is narrowing,” Kapoor said.
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True , but the fact is price have not fallen in pune and mumbai lika cities.The builders have thier strong union and trying to sustain this phase without reducing prices.
TRUE REALTY BUYERS, PLEASE HOLD YOUR MONEY FOR 2-3 YEARS. SURE TO GET 30% LESS PRICE FROM HERE.
Average earning in cities like Nashik, Indore etc may be 15K or less. How on the earth some one can afford the flat for 20 Lakh. This is Ridicules. Any wise buyer should hold on at least until the beginning or middle of 2010.
Questions also should be raised who should determine the margin of profits?Should it be the corporate's monopoly or can we devise a system where margins are kept under check. And ofcourse one reader has rightly said, grid will bring disaster.
If private equity players and other money bags drive the prices of flats beyond the reach of average consumer, then they themselves should come and occupy the finished flats.This only proves that when there is no limit to the greed, disaster will follow.
They are selling houses worth 10 lakhs for 50 and 60 lakhs. How can people buy them? All the fools hand all the ones with bribe and balck money have have bought some of those houses. Others do not have or are not fool enough to buy them.