Mumbai: A clear mismatch between demand and supply, unaffordable prices and oversized flats have contributed to sluggish property sales in Mumbai, Thane and Navi Mumbai areas, real estate services major Jones Lang LaSalle (JLL) said on Thursday.
A JLL and Confederation of Real Estate Developers Association of India (CREDAI) analysis found that buyers are playing the wait and watch game expecting prices to further fall even as developers are wondering at the continued slump despite offering numerous discounts, JLL said in a statement.
Currently, there are as many as 77,460 unsold residential properties in Mumbai, Thane and Navi Mumbai at various stages of construction valued at Rs.3,046 crore.
Of these, only 2,600 units are completely constructed representing just 3.35 percent of the total unsold inventory. The completed-yet-unsold inventory is lesser at 2,600 units in 2015 compared to last year’s (2014) 3,094 units, the statement added.
The unsold residential inventory is distributed into 5,311 units priced above Rs.5 crore, 16,913 units priced between Rs.2-5 crore, 35,715 units priced between Rs.65 lakh to Rs.2 crore and 19,521 units priced below Rs.65 lakh. Suburbs from Vile Parle to Goregaon have 205 completed-yet-unsold units in the range of Rs.2 crore and above.
Residential units priced below Rs.65 lakh are mostly located in the emerging areas of Navi Mumbai like Ulwe, Karanjade, Dronagiri or on faraway stretches off Ghodbunder road in Thane.
Buyers prefer completed projects and the market has become end-user driven as investors are no longer parking funds in residential real estate as the era of high returns has diminished, the statement added. Social and physical infrastructure is another crucial aspect of sales as it is a big pull factor for buyers, JLL said.
The analysis highlighted that larger flats must be redesigned into smaller units wherever possible. Buyers are avoiding buying properties from developers with a poor project completion track record.
The analysis advised developers to adhere to construction deadlines as buyers prefer completed projects. As many 27 percent of the buyers bought houses nearing completion while only 18 percent bought houses during the launch phase, the statement said. The inventory overhang in Mumbai has been observed for more than 30 months.