While Mumbai lags behind Delhi in the volume of unsold residential properties, a recent study indicates that it will require a more extended period to liquidate them. Real estate developers operating in Mumbai are projected to require more than three years to sell off 1.13 lakh units, which is equivalent to approximately 120 million square feet. This is primarily attributed to elevated property prices that discourage potential buyers. The findings come from a study published by Liases Foras, a well-regarded real estate rating and research consultancy. This analysis encompasses properties located within the Mumbai Metropolitan Region (MMR), including Mumbai city proper, Thane, Kalyan, and Navi Mumbai, as well as the National Capital Region (NCR) in Delhi, Pune, Hyderabad, Bangalore, and Chennai.
The NCR, possessing a more substantial inventory of unsold homes—approximately 232.57 million square feet or 1.60 lakh units, nearly double that of Mumbai—is expected to achieve quicker sales, estimated at around 23 months.
According to Om Ahuja, chief executive officer (residential services) at Jones Lang LaSalle India, "The NCR market is primarily an investor market and has very little comparison with Mumbai. The real estate market in areas like Gurgaon or Noida attracts a lot of money from neighbouring states like Punjab, UP and Delhi as people invest in residential properties."
Among the six major metropolitan areas studied, Pune is predicted to have the swiftest sales rate, projected to take only 14 months to sell its 43.06 million square feet, given the current purchasing patterns. A substantial increase in interest rates over the preceding 18 months has emerged as a crucial factor in suppressing sales, as prospective buyers seek to avoid substantial home loan payments.
To stimulate the market, the Reserve Bank of India implemented a reduction in key interest rates by 50 basis points, subsequently pressuring lenders to decrease their retail lending rates. This intervention has the potential to provide a significant boost to property sales.