At a time when India is witnessing massive shortage of housing, 4.8 lakh houses remain unsold in Mumbai and its surrounding areas. The metropolis has the highest number of unsold flats in the country followed by Delhi and Bengaluru where 3 lakh houses are yet to find buyers. As per various reports, while India is facing a shortage of houses, on the other hand, a large number of flats remain unsold in major cities of the country. The Modi government had promised to provide affordable housing for all by 2022 but it lacks proper road map to fulfil this objective. Most of the builders are focussed on constructing premium projects targeting rich and upper middle class sections and they are not interested in building affordable housing projects for the lower middle class and economically weaker sections.
Since real estate cost remains expensive in Mumbai, hence lower middle class people are unable to purchase a home in the metropolis. Therefore, they search for cheaper homes outside the city limits but have to commute long distance to reach their workplaces. The major reason behind demand and supply disparity is due to lack of affordable housing options available to economically weaker sections. If situation continues to remain in this manner the Modi government’s housing for all scheme will remain a pipe dream.
Gautam Chatterjee, MahaRERA Chairperson said that there is a huge mismatch between supply and demand which has resulted into piling up inventories of unsold flats in the city. He also said, “The housing shortage and the resultant demand is in low income housing category but the supply is in the non-affordable segments. The necessary corrections are now taking place with supply moving to the affordable housing category.”
“The unsold flats hitherto were meant for investors to pick them up. With price corrections now taking place the investors are opting out. Actual users will look for flats which they can afford,” he added.
Another reason behind the huge unsold inventory of houses is Mumbai is due to builders’ reluctance to slash property rates. Often it has been observed that real estate developers adopt a wait and watch policy and don’t reduce prices of apartments as most of them remain unsold for a long period of time.
Santosh Singh, a Kandivali resident said, “I was surprised to hear about the large number of unsold flats in Mumbai. I am staying in rental accommodation and planning to buy a house in the city. Due to expensive realty prices, I wonder how I will be able to pay my monthly loan instalments. The government should take steps to provide affordable housing to economically weaker sections of the society.”
Demonetisation is another factor which has dampened market sentiments as many buyers who used to pay certain amount of the property purchase amount in cash were finding it difficult to complete the deal due to liquidity crisis. Many black money holders who used to regularly invest money in real estate had to stay away from the sector after note ban. Various other factors like higher stamp duty, cumbersome documentation work for property, registration and difficulty in obtaining housing loan too is affecting the sale of houses in the city.
Apoorv Kushwaha, Digital Business Enabler working with an aromatherapy brand in Mumbai said that it is difficult to buy a flat in the city due to super expensive property prices. He also said, “Jobs are not restricted to one city. The overall cost of living is very high and it increases once you have a family and children. Buying a flat on equated monthly instalments (EMI) also creates a financial burden for the family.”
“Resale value of the flat and real estate value growth is not very certain in this time, considering the change in climate and rising sea levels. Flats which are affordable are generally located in the outskirts of the city making it difficult to commute for employed personnel and also kids studying in schools,” he added.