Realty Bites
James Joseph, a media professional, had been house-hunting for over a year. He had hoped to buy a two-bedroom flat in Navi Mumbai to accommodate his family of four, who were then cramped in the single-bedroom flat he owned. He sold his old flat, looking to purchase an apartment in one of the upcoming towers in Kharghar, a residential node in the city where 1,000 sq. ft flats were priced at Rs 1.3 crore upwards. He had almost zeroed in on an apartment-but then, following the larger downturn in the Indian economy, his company froze staff wages.
"There is no point in taking a loan with monthly instalments over Rs 50,000 when the future of your job is uncertain," he says. Joseph is now planning to move into a rented two-bedroom flat instead. Will he buy a flat in Mumbai in the future, considering that his two children are studying at schools in the city? "Why buy a home here and take a financial hit?" he asks. "I would rather invest my money in a scheme that gives me good returns by the time my children are in college." He's not alone. Several potential buyers in Mumbai share his sentiment, shying away from home purchases as employment prospects turn gloomy.
The Indian real estate sector-valued at Rs 8.3 lakh crore, as per the NITI Aayog's February estimate-is in the grip of one of the worst slowdowns in a decade. A report by realty consultant Knight Frank India, published in July, estimated that unsold home inventory in eight key cities-Mumbai, the National Capital Region (NCR), Bengaluru, Chennai, Hyderabad, Ahmedabad, Pune and Kolkata-stood at 450,263 units in the first half of 2019. And although new launches in these cities were up by 21 per cent in the first half of 2019 (compared to the same period in 2018), sales rose just 4 per cent in the same period. The Mumbai Metropolitan Region had the highest unsold inventory, at 136,525 units in the first half of 2019. The NCR came in second with 130,000 unsold units, while Bengaluru was third with 85,387 unsold units. "The golden years of Indian residential real estate are well and truly over, at
