India’s luxury housing market at a standstill

Isaac Mostovicz writes that many luxury apartments under construction in India are yet to be sold...

Donald Trump is soon to take the Trump brand over to India, but the Wall Street Journal reported recently that India’s surge in luxury property might be a while off yet.

Growth in India has boomed in recent years where there are now more than 126,000 US dollar millionaires. In Mumbai, where Trump’s new 60-story luxury apartment will be launched, around 3,700 luxury properties are currently under construction with a price tag of $1 million or more. Yet of these, around 1,440 are still unsold. In Delhi, one quarter of the 2,300 luxury apartments under construction are unsold. In the last few months, sales have slowed down due to the steep prices, which have seen some properties come with a price-tag of up to $12 million.

In India, property developers tend to ensure apartments have a definite buyer before finishing construction. With higher rates, and fewer interested buyers, many of these prospective apartments may be put on hold which may mean developers have to cut prices or offer perks to entice buyers. This step has not yet been taken, but with the Indian stock market having fallen by more than 10% this year, and banks becoming increasingly cautious about lending to real estate developers, the pressure is on and the clock is ticking.

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