By Rohit Sharma
The residential demand in Mumbai Metropolitan Region (MMR) which is said to be high has 126,434 unsold stock which around takes 8 QTS to sell the particular inventory according to H2 (July – December 2018) report of Knight Frank.
The Navi Mumbai has 23,527 unsold inventory followed by Central Mumbai 22,690, Western Suburbs with 21,829 and so on. In the race of unsold inventory, NCR tops the list with 142,007 unsold units.
The report launched on Tuesday also shows Mumbai Affordability Index level dropped nearly 400 bps. The index indicates that House price to Household Income Ratio in Mumbai has reduced from 11 points in 2010 to 7.2 in 2018.
Arvind Nandan, Executive Director Research – Knight Frank which gave presentation at launch told Accommodation Times that, “There is a fall in affordability index from 11% to 7.2% which is good but when the percentage will fall from 7.2% to around 4.5% it would be a big relief to home buyer and real estate will pick up instant pace.”
Infrastructure and price are some reason for unsold inventory in MMR and nearly 70% of the projects are affordable and rest 30% doesn’t fall under the affordable category, he added.
The founder of IMC, Ajay Chaturvedi said, “There is a price mismatch in the inventory sold in the market to buyers. Buyers can invest 4 times more than his annual income for his dream home and if the price of a home is more it automatically lands up into unsold inventory. There is one more reason for unsold inventory is that over excess supply of homes.”
However, In real estate, there is 3.5 to 5 years time frame for selling the inventory and I believe the figure will change coming days.
There is also a sustained price drop in Mumbai, Pune Chennai and Kolkata at 7%, 3%, 3% and 4% respectively. Including freebies, the effective price drop of 10%-15% continues in the cities like Mumbai, NCR, Pune and Kolkata in which Hyderabad has seen a price growth of 7%, the report said.