There are 77,000 unsold apartments in the Mumbai Metropolitan Region (MMR). According to a report by real estate consultant Jones Lang Lasalle (JLL) which provides the unsold inventory figure, Mumbai’s residential realty market performed much below expectations in 2015.

Brokers in the city told The Hindu that buyers are on a wait-and-watch mode in anticipation of prices coming down. But there is also a fear of price appreciation, one broker said.

“The salaried class working in sectors like oil and energy are cautious about buying,” he added.

JLL India said it will take almost 11-14 quarters (three years or more) to sell this backlog against a healthy expected cycle of four to six. “Only about 3.5 per cent of this inventory is completed or ready for possession,” it added.

Ashwinder Raj Singh, CEO, Residential Services, JLL India said, “It is easy to put the entire blame on slowing demand, but the reality is that an astounding 70 per cent of the unsold inventory is priced at Rs 1 crore and above. If we compare this to the average annual household income of a Mumbaikar, approximately Rs 7.5 lakh, we get a clearer perspective of the slowdown”

The firm also said there aren’t many projects where apartments are priced in the range of Rs 30-65 lakh. It is this segment that is driving much of the demand in Mumbai.

Experts say the cost of a home should not exceed five years of annual household income. “People expect the prices to come down,” said Jaysinh Kapadia, president of the Association of Real Estate Agents Mumbai for western suburbs. “There is a fear of price appreciation among buyers. Builders, on the other hand, are not willing to bring down the prices due to increasing construction costs.”

Ulhas Dange, Secretary, Navi Mumbai Association of Realtors (NMAR), said that in case of apartments priced over Rs 1 crore, most people are waiting on the sidelines. “Most buyers are in oil and energy sectors, as well as some NRI buyers. People are worried about the fall in oil prices and also the impact of exchange rates.”

JLL’s Raj Singh said developers embarked on premium projects in response to a thriving economy, foreseeing potentially robust demand. However, they feel, there has been some scpeticism on the economy front, and therefore, buyers play the waiting game, Mr Singh said.

He added that most builders in Mumbai have chosen to wait for the economy to grow, and for buyers to be more comfortable with paying high prices. “Those without deep pockets offer discounts and also cut the price marginally.

JLL said the average price of a two-bedroom house in Mumbai was approximately Rs 3 crore in 2014, and this has come down to around Rs. 2.9 crore in 2015. For MMR, this is at Rs. 1.32 crore (2014) and Rs. 1.31 crore (2015). These reductions may not look attractive enough for buyers to make a rush, it added.