Realty sector in Mumbai: High prices hit demand
Realty sales in Mumbai Metropolitan Region (MMR) have fallen. The total area (m sq ft) sold in MMR in December 2009 as compared to September 2009
quarter, has come down. Prices have risen or remained flat in some cases. This shows that homebuyers are holding on to their demand and exercising restrain. Demand for big-ticket houses has been the worst hit.
As per the data compiled by Liases Foras, a real estate research agency, flats costing Rs 1 crore to 2 crore have seen a sharp fall in demand which is contrary to what many developers in the region have been saying. Homes costing over Rs 2 crore are also witnessing the same trend. This is in contrast to cities like Bangalore, Hyderabad and NCR, where sales have risen, thus proving again that Mumbai property market defies rules applicable to other markets. The main reason for the same being that prices have fallen in the above-mentioned cities whereas Mumbai based developers have been increasing their prices.
They must realise that ‘Customer continues to be the king’, at least for the time being.
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Is the real estate sector headed for another correction?
Real estate prices came out of a recent trough in tandem with the financial restructuring of many debt-laden developers and a revival in home buying on the back of greater consumer confidence and lower interest rates.
New Delhi: The Indian realty market could be headed for a correction as more homes come into the market at elevated prices, say real estate experts. High-end houses in Mumbai and the National Capital Region (NCR) are the most vulnerable.
“There is a possibility of a double dip in residential real estate,” said Abhishek Kiran Gupta, head of operations, research and real estate intelligence service, Jones Lang LaSalle Meghraj (JLLM). JLLM is a property consultant firm with branches all across the world.
Real estate prices came out of a recent trough in tandem with the financial restructuring of many debt-laden developers and a revival in home buying on the back of greater consumer confidence and lower interest rates.
According to the data available with the international property consultant, between the third and the fourth quarter of this fiscal, Noida-Greater Noida and Gurgaon in NCR saw the launch of 33,724 new units whereas Mumbai got 7,371 units. Bangalore witnessed the launch of 4,788 units in the same period.
Gupta of JLLM says that prices of affordable homes across the country have gone up by 5-10%, while mid-end to high-end housing has seen a rise of 20%. “But Mumbai has been leading in terms of price hikes,” he added.
I dont quite know if this is all true. I get the feeling that prices are rising and dont know if crash is imminent. But I hope it does crash and soon.
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