Now outstripping China as the world's fastest-growing major economy according to official data, India has a real estate market mired in debt piled up in a 2006-2007 construction boom that gave way to slowdown.
It now takes developers about 4-1/2 years to turn property inventory into cash, more than a full year longer than it takes developers in China.
It's not just bad news for developers in megacities like Mumbai, now seeking ways to offload inventory with increasing intensity. It's also making it harder for many debt-burdened lenders to pass on interest rate cuts to borrowers, hindering central bank efforts to accelerate growth: India's central bank has cut rates twice this year, with more cuts expected.
"It is a buyer's market," said Preeti Patil, a 28-year-old who works for a large Indian media group and was in the market for a two-bedroom house in the suburbs of Mumbai. "Last week, we turned down a deal, two days later we had the builder call us to offer $8 (500 rupees) per square foot discount."
Even worse for developers, Patil is among those who have little confidence property prices will rise in future. Despite cut-price offers, she abandoned plans to buy, saying she feared the investment would not reap near-term returns.
Offers of coins of gold - prized in Indian culture - motorbikes and even Apple Inc iPhones have begun to feature in developers' advertising in recent weeks, prospective buyers say. While it's too early to say whether tactics like this will be enough to reel in upwardly mobile professionals and newly wealthy middle classes, demand for scores of empty, or under-construction, high-end residences remains flat.
At brokerage Kotak Securities, analysts estimate unsold inventory held by a group of leading Mumbai developers alone now stands at some 534 billion rupees ($8.5 billion) - with an additional Rs 368 billion of project launches in the pipeline.
That puts the current, unsold area in Mumbai at almost the value of the total sold in the 2014 calendar year. The backlog, analysts estimate, could take more than a decade to clear.
"The overall market has slowed down in the last two years... overall demand has gone down," said Niranjan Hiranandani, managing director of privately held developer Hiranandani Constructions.
Hirandani's own 500-acre residential project in Navi Mumbai, a new suburb east of the city, is gearing up for construction after being stalled for more than two years and does not have a completion date. Hiranandani declined to provide figures for his company's inventory, but said he was comfortable with its position.
Issues ranging from a lack of approvals, a cash crunch and low demand mean several other Mumbai projects by developers such as IndiaBulls Real Estate and DB Realty have also slowed or stalled. Demand has been squeezed in part by Mumbai residential property prices more than doubling between 2009-2012.
Part of the trouble is the excess supply of premium homes. While developers built houses to be sold at price tags of over $160,000, the huge bulk of demand is in the Rs 500,000 to Rs 2 million range ($8,000 to $32,000), said Kotak Securities analyst Akhilesh Tilotia.
"On one side, there's a housing shortage and on another you have rising inventory and that's a very big paradox," Pankaj Kapoor, chief executive of real estate rating and research firm Liases Foras said.
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