Friday, July 23, 2010

After the engineered price boom, it’s raining discounts in real-estate

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"Property prices have started showing correction as sales are not happening. After the first quarter of the current fiscal, property sales are down by around 15% in Mumbai. End-users have disappeared from the market," said Pankaj Kapoor, founder, Liases Foras, a real-estate research agency.

Mumbai is expected to report lesser volume of real-estate transactions over the next six months, according to industry experts. "We are going to see lower volumes of transactions in the next six months compared to the past six months, if prices do not come down," said Pranay Vakil, chairman, Knight Frank (India) Pvt Ltd.

If the current trend of discounts by developers is any sign of things to come, a much-belated correction in property prices in Mumbai might finally happen. Prices of various real-estate properties - both residential and commercial - had shot up by 30% in a few pockets of Mumbai over the past six months.

Thursday, July 22, 2010

Skywalks/Malls threaten commercial shops values on busy streets

Mumbaikar's have seen skywalks mushroom all over the city and as with every other thing some have been a success whereas others have not.

I regularly pass thru the Bandra (e) skywalk and notice that there are very few people on it, however I recently made a trip to Santacruz(w) and lo behold the skywalk was packed with people going in both directions. I looked at the stores below and not surprisingly they were empty. More and more people are shopping in malls and skipping small niche shopping locations like Santacruz(w) and now with these skywalks any foot traffic which could venture into these shops is now eliminated.

I was real surprised to see most shopkeepers whiling their time looking at the traffic and wonder how they must feel about this contraption over their heads which is eating into their livelihood and property values.

In fact I think the only thing keeping these commercial prices high is the redevelopment syndrome which seems to be prevalent in all older neighboorhoods. I believe builders will have an upper hand when they negotiate as the shop keepers would rather cash out then endure the rapid decay in their profits.