Real Estate Crisis: Unsold Homes Surge in India’s Metro Cities, Hyderabad Worst Affected
The real estate sector in India's major metro cities is facing a crisis with a significant increase in unsold homes. Hyderabad is the worst-hit city, with a staggering 98,000 unsold flats, highlighting the lack of demand for affordable housing.
Real EstateUnsold HomesAffordable HousingHousing MarketMetro CitiesReal Estate NewsJun 30, 2025
As the real estate boom in these cities slows down, it has been observed that the number of houses built has increased significantly compared to the number of buyers. This imbalance has led to a glut of unsold properties, causing concern among developers and stakeholders.
In Hyderabad, the situation is particularly severe. Due to a lack of demand for affordable housing, the number of unsold flats has reached 98,000—no other city in the country faces such a dire situation regarding affordable housing. The number of unsold homes has increased by 177 percent, reaching a five-year high. This surge in unsold properties is attributed to the mismatch between the housing supply and the demand for affordable homes.
In other cities, the situation is also concerning, though not as severe as Hyderabad. Mumbai, the financial capital, has 1.8 million unsold homes. Delhi, the national capital, has over 84,000 unsold homes. Bengaluru, known for its tech industry, has 58,700 unsold flats, and Pune has 81,400 flats unsold. However, Bengaluru has seen a significant decrease in its inventory of unsold homes, which is a positive sign for the city's real estate market. Chennai has 29,000 unsold homes, while Kolkata has 28,000, reflecting relatively low inventory levels.
Since the onset of the COVID-19 pandemic, there has been a noticeable shift in housing preferences. People’s demand for luxury homes has increased more than for affordable homes. Experts attribute this trend to the higher spending power of the affluent segment of the population. Moreover, developers are launching more luxury projects to maximize profits. However, this strategy has its own pitfalls. Since luxury homes are not being bought in large numbers, the supply has outpaced demand, causing a rise in vacant homes.
With many people’s spending power decreasing due to economic uncertainties, many prefer renting over buying. This preference for renting over owning is believed to be a key reason for the decline in demand for affordable homes. The combination of higher prices and reduced purchasing power has further exacerbated the issue, leading to a surplus of unsold properties.
Experts warn that the ongoing crisis in the real estate sector could have far-reaching implications for the economy. The lack of demand for affordable housing could lead to a slowdown in construction activities, affecting employment and related industries. Additionally, the increase in unsold properties could lead to financial stress for developers, potentially resulting in project delays or even abandonment.
To address the crisis, experts suggest that the government and real estate companies need to work together to bridge the gap between supply and demand. This could involve offering incentives for developers to build more affordable homes and implementing policies to make homeownership more accessible to the middle and lower-income segments of the population. Additionally, promoting rental housing as a viable alternative could help alleviate the pressure on the housing market and provide more options for those who cannot afford to buy.
In conclusion, the real estate sector in India's metro cities is facing a significant challenge with the surge in unsold homes. While Hyderabad is the worst-hit city, the issue is widespread and requires a concerted effort from all stakeholders to find a sustainable solution. The focus should be on addressing the demand for affordable housing and ensuring that the housing market remains balanced and accessible to all segments of the population.
Frequently Asked Questions
What is the current state of the real estate sector in India's metro cities?
The real estate sector in India's metro cities is facing a crisis with a significant increase in unsold homes. According to a report by Anarock, 559,000 houses remain unsold across seven metro cities.
Which city is the worst-hit by the real estate crisis?
Hyderabad is the worst-hit city, with 98,000 unsold flats, reflecting a 177 percent increase over five years. This is primarily due to a lack of demand for affordable housing.
Why is there a preference for luxury homes over affordable homes?
Since the COVID-19 pandemic, there has been a shift in housing preferences, with increased demand for luxury homes. Developers are also launching more luxury projects for higher profits, despite the lower demand for affordable homes.
How has the pandemic affected the real estate market?
The pandemic has led to a decrease in people's spending power, causing many to prefer renting over buying homes. This has contributed to the decline in demand for affordable homes and the increase in unsold properties.
What solutions are suggested to address the real estate crisis?
Experts suggest that the government and real estate companies need to work together to bridge the gap between supply and demand. This could involve offering incentives for developers to build more affordable homes and implementing policies to make homeownership more accessible.
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