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Unsold luxury homes increase in cities

New Delhi, July 26 () : Home sales fell in Chennai, Mumbai, Pune, NCR region in the last month quarter but picked up in Bangalore, according to Liases Fora, a property research firm.

Builders offered many attractive schemes to the buyers. Yet, home sales in Chennai declined by 7%, Pune by 15%, Mumbai by 12% and Delhi-NCR by 13%. Bangalore was the exception. The city became the favourite destination for NRIs and many housing schemes for the middle class were launched in the garden city. It saw a 25% increase in home sales. The study says that luxury homes were not moving at all.

CREDAI (Confederation of Real Estate Developers Associations of India) Chairman Lalit Jain reacting to the report said that with the economic slowdown, the buyer is not interested in various attractive schemes and nothing clicks. Only if banks offer loans at low rates will sales pick up.

The survey says that these cities have 669.95 million sq ft of constructing homes waiting to be sold. To get these homes sold would take 32 months at the present rate. RBI squeezing banks to prop up rupee has resulted in a cash liquidity crunch and interest rates would increase for loans. The builders will have no choice but to slash prices and profit margins.

Property prices have stagnated due to lack of buyers. The builders who have taken loans to build the apartments will now look for cash flow to repay it and so either they cut prices or hike marginally.

Chennai, Mumbai and Bangalore saw a marginal rise of 1% and in Pune it was 9% and NCR upped by 3%. In Mumbai, the inventory of unsold houses is 146.10 million sq ft – an increase from 139.33 million last year. To clear the backlog, it would take at least 48 months.

By paying 20% of the cost, a buyer can book a home. 15% discount is offered on unsold homes in Mumbai.