As per the half yearly report on the India real estate by Knight Frank India, the housing prices in Mumbai declined by 5 per cent on a year-on-year basis in 2017. The fall, according to the report, is the biggest in the decade. Samantak Das, Chief Economist and National Director, Knight Frank, while presenting the report said, "The 5 per cent drop in prices is actually the result of the total cost benefit of 11 per cent to 12 per cent that the house buyers are getting in Mumbai." He further added that other waivers such as the stamp duty charge waiver provides additional 5 per cent cost benefit.
According to the report, NCR and Mumbai have seen sales numbers increase by 21 per cent and 19 per cent on a year-on-year basis, respectively, during the second half of calendar year 2017. The rise, as per Knight Frank, can be attributed to the historic low base brought about by the government’s demonetisation drive. However, the July-December sales figures of these cities in 2017 were still significantly lower than the second half of 2014 and 2015, clearly depicting an underlying declining trend, as per the report.
The drop in the launching of new projects have positively impacted the unsold stock. The unsold inventory levels had peaked in 2014 at 0.72 million units. According to the report, unsold stock declined across the country. In Mumbai, unsold inventory declined 25 per cent to 115,964 units. In the NCR, it dropped 11 per cent to 166,831 units. Across markets, level of unsold inventory dropped by 19 per cent to 552,996 units.
According to the report, industry experts felt that measures such as RERA and the Pradhan Mantri Awas Yojana that were expected to boost sentiments of the home-buyer were yet to make any significant impact on the buyer who had little incentive to buy. “The pace at which developers align themselves to the new regulatory norms and launch new products in the right ticket sizes that appeal to the homebuyer’s interests will determine the trajectory of the market going forward,” the report stated.