Increased housing prices in Mumbai disappointed sales bookings at city’s largest property exhibition, considered an indicator of buyer sentiment for real estate in the city and its suburbs. Property prices in Mumbai have increased by 10-25 per cent since the previous exhibition was held in November, analysts said.
Analysts say that that a drop in prices is unlikely soon. Transaction volumes are expected to remain tepid as developers continue to hold on to their high prices in the face of declining sales, HDFC Securities Research said in a report on April 15.
With the developers not officially trimming quoted prices across projects; investors (and not actual home buyers) will continue to account for the bulk of sales across new launches, analyst Adhidev Chattopadhyay said in the report. About 84 per cent the projects in Mumbai and its suburbs that were presented at the exhibition were priced at over Rs 8 crore, and most of the remaining at over Rs 1 crore, HDFC said.
The exhibition, held for four days till April 14, presented about 15,000 properties, most of them in Mumbai, Thane and Navi Mumbai. It was held by the Maharashtra Chamber of Housing Industry (MCHI) and the Confederation of Real Estate Developers’ Association of India (Credai), industry lobbies that have combined their operations in the state. Real estate sales have been slow since 2012 across major property markets in India, except in Bangalore, which has seen a steady pace of project launches and sales.
Property advisory Knight Frank India report said launches of residential units in the national capital region (NCR) fell 31 per cent to 33,500 units in the second half of 2012-13, and warned of a continuing slowdown in launches and sales in India’s largest property market this financial year as well.
Paras Gundecha, president, MCHI-Credai, conceded that while the exhibition drew many visitors, sales was tepid. If project approvals take 2-3 years to come in, developers need to pay heavy interest.
This is the reason why discounts are also very less and price correction is not possible, at least in Mumbai, said Gundecha.