Bengaluru: More and more buyers are opting ready-to-move-in homes rather than those under construction as projects get delayed and developers miss delivery deadlines.
Only 2,600 or 3.35% of the total 77,460 unsold residential units across Mumbai, Thane and Navi Mumbai are ready for possession, according to data compiled by property advisory JLL India and Confederation of Real Estate Developers Association of India (Credai).
The percentage of total unsold units that are ready for possession in Mumbai, Thane and Navi Mumbai were 1.10%, 1.33% and 8.13%, respectively.
Slowdown in sales continues even as developers in Mumbai wonder why end-users are not buying into their projects despite offering discounts and easy payment schemes. Buyers meanwhile are playing the wait-and-watch game, expecting prices to go down further given the slump in sales.
“This not only means that customers feel the comfort of buying when a project is nearing completion or is ready but it also indicates that developers need to continue project construction by maintaining financial discipline. They need to use customer advances judiciously to keep constructing without slowing down and only then will it lead to better sales," said Ashutosh Limaye, national director—research, JLL India.
The inventory overhang in Mumbai, including Thane and Navi Mumbai, is more than 30 months, as of March 2015. The current inventory of completed-yet-unsold units (2,600) when compared to corresponding number (of 3,094 units) around the same time last year shows a decrease.
However, there is slow absorption or sales as buyers are holding on to their purchase decisions, expecting a price correction in this weak market, said Limaye. The market has become largely end-user driven and investors no longer park funds in residential real estate, as the high returns that it was once known for, have diminished considerably.
The sluggish sales can be attributed to most of these 2,600 units being priced above ₹ 1 crore. Mumbai’s western suburbs from Vile Parle to Goregaon have 205 completed-yet-unsold units in the range of ₹ 2 crore and above, while a major chunk of the unsold units are concentrated in Navi Mumbai. Units priced below ₹ 65 lakh are situated in emerging areas of Navi Mumbai like Ulwe, Karanjade and Dronagiri, or on the far-away stretches of Ghodbunder Road, Thane.
In such a scenario, developers might have to reduce ticket sizes to align with more realistic prices to improve sales. They might even need to redesign the larger flats into smaller unit sizes, wherever possible.