About 83,000 residential units (flats) or 3
quarters worth of inventory was unsold at the end of 2012 in Mumbai, the
India's most expensive property market, said a property consultancy company
Knight Frank India report.
The increase in
inventories coupled with stagnating absorption levels are bound to put further
pressure on prices.
In the Mumbai
Metropolitan Region (MMR), absorption level in 2012 has estimated to have
dropped by more than 62 % from their 2007 heydays. However, as compared to 2011
it has dropped by just 3 % to 42,200 flats, the report said.
Of this inventory,
about 39 per cent of the units are under construction & going by the
average absorption rate of the preceding eight quarters, this translates to
about 6 quarters worth of unsold inventory at the end of 2012 compared to 5
quarters for the previous year.
The rise in interest
costs for the real estate sector & decline in net profits during 2012
compared to the previous period is likely to compel developers to lighten
unsold inventory levels & deleverage their balance sheets, said the Knight
Frank India report.
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