It's time builders offer discounts to push sales

Property brokerage firm Anarock on Friday said cash-starved builders are sitting on ready-to-move-in housing units worth Rs 66,000 crore across seven cities and asked them to offer discounts to clear their finished unsold stocks during the ongoing coronavirus pandemic.

According to Anarock, there were 78,000 unsold ready-to-move-in flats at the end of March quarter across seven cities namely Delhi-NCR, Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Hyderabad and Pune.

These units are worth about Rs 65,950 crore. "Developers need to take a call on what they want to do with their unsold inventory, depending on their holding capacity and financial distress, if any," Anarock Chairman Anuj Puri said.

"Organized developers with strong balance sheets are less apt to offer discounts, but those which need liquidity urgently will need to consider their options. These would include discounted prices and other incentives," he added.

The unsold ready-to-move-in units contribute 12 per cent of the total unsold stocks of over 6.44 lakh units. The remaining 88 per cent are under construction.

Puri also advised first time homebuyers to negotiate hard with builders and get a good deal on ready-to-move-in apartments. He said interest rates on home loans are low at 7.15-7.8 per cent.

"The lockdown period has kick-started rapid technology-led evolution on the Indian real estate market," said Puri.

"Some states are now also mulling the introduction of e-registration of property documents, thereby completing the entire value chain.

This is necessary since physical site visits are unlikely to pick up quickly even after the lockdown ends, as both buyers and sellers will remain wary," he added.

As per the data, Hyderabad has the least unsold ready stock of nearly 2,400 units worth Rs 1,870 crore.

The highly Covid-19-impacted MMR (Mumbai Metropolitan Region) has the maximum ready stock of nearly 19,200 unsold homes worth Rs 26,150 crore. Pune has the second-highest ready unsold stock of nearly 16,000 units worth over Rs 11,400 crore.

Delhi-NCR comes third with nearly 15,600 unsold ready homes worth Rs 10,720 crore, while Bengaluru has ready unsold stock of approximately 10,100 units worth Rs 7,150 crore.

Chennai has nearly 9,400 ready unsold units in the city worth nearly Rs 5,800 crore. Kolkata has ready unsold stock of nearly 5,300 units worth Rs 2,860 crore.