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Why homes aren’t selling in Delhi and Mumbai

An equilibrium between buyers and sellers will be reached eventually, but before that there may be more blood on housing street

  This has been a monsoon of discount offers for residents of Mumbai and Delhi. Every day, a barrage of messages, emails and media advertisements assail us, from desperate real estate firms. A housing slowdown has been around for some time but now there are visible signs of panic.

But buyers, particularly in north India, are just not interested. Sellers, having patiently waited it out so far, are now beginning to throw in the towel. An equilibrium will be reached eventually, but before that there may be more blood on the housing street.

A recent Knight Frank report says that the residential housing market in Mumbai remained absolutely flat in the first half of 2018, despite prices falling nearly 10% in this period. The city has more than 1.2 lakh unsold flats. Some estimates suggest that it may take four years to clear Mumbai’s unsold housing inventory. In Delhi, this number is even higher, at 1.5 lakh units. And for the top seven Indian cities, there are now nearly half a million unsold flats. This is scary. Demonetisation, RERA and GST have been tossed around as reasons for a while now, but it is time to question whether a deeper malaise affects the Indian real estate sector.



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