Real Estate Sector in Crisis: Over 5.5 Lakh Homes Remain Unsold in Metro Cities

Hyderabad: The real estate sector in India’s major metro cities is facing a severe downturn as unsold housing inventories continue to pile up at an alarming rate. According to a recent report by Anarock, a staggering 5.59 lakh houses remain unsold across seven key metropolitan cities, raising concerns among builders and real estate developers.

Hyderabad Tops the List with 98,000 Unsold Homes

Hyderabad has emerged as the city worst-hit by the unsold housing crisis, particularly in the affordable housing segment. The city now has 98,000 unsold flats, marking a 177% increase in inventory and the highest level in the past five years. Experts attribute this surge to low demand for budget-friendly homes, even as construction activity continues to rise.

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Inventory Piles Up in Other Metro Cities

Other major metros are also struggling with unsold housing stock:

• Mumbai leads in overall numbers with 1.8 lakh unsold homes
• Delhi-NCR has over 84,000 unsold units
• Pune reports 81,400 unsold flats
• Bengaluru has 58,700 unsold homes, though it has shown some improvement
• Chennai and Kolkata have relatively lower unsold inventories, at 29,000 and 28,000 respectively

Despite Bengaluru’s relatively positive trend, the broader market across cities is clearly oversupplied.

Shift in Demand from Affordable to Luxury Housing

Since the COVID-19 pandemic, there has been a notable shift in consumer demand—from affordable to luxury homes. Developers, chasing higher profits, have increasingly focused on launching luxury residential projects. However, this has led to a supply-demand mismatch, with luxury homes remaining largely unsold as well.

Decline in Buying Power and Rise in Rentals

One of the key reasons behind the fall in home-buying is the decline in consumer spending power. Many potential buyers are opting to rent instead of purchasing, especially in the current economic climate. This shift is contributing significantly to the rising inventory of unsold homes across all housing segments.

Experts Warn of Long-Term Impact

Real estate experts caution that if this trend continues, the sector may face long-term consequences. Overbuilding in a low-demand market not only ties up capital but also leads to stagnation in real estate growth. A course correction in pricing and project strategy is being urged by analysts to restore balance in the market.