Laws of Demand and Supply do not apply to Flats in Mumbai
Mumbai realty experts feels Mumbai property prices likely to drop. Though not all realty experts may agree on that, the general sense is that prices will correct by at least 15 per cent in the next six months.
With 93,000 under-construction properties and ready-for-possession homes still unsold, the ‘weighted average’ cost of a flat in Mumbai is at its peak. If the current pace of sales continues, it will take 35 months for the current stock of unsold homes to find buyers, feel realty experts.
On an average, the cost of a flat in Greater Mumbai (area under BMC limits) is pegged at Rs 2.18 crore. That’s a 436 per cent rise compared to 2005 prices. Managing Director of Liases Foras, Pankaj Kapoor, points out at a price-sale pattern, not particularly to Greater Mumbai but in the entire Mumbai Metropolitan Region that includes Greater Mumbai, Thane city and Navi Mumbai. “When prices fell, sales picked up. Like, when the per-sq-foot weighted average price in the metro region fell from Rs 8,100 in 2008 to Rs 5,300 in 2009, sales improved from 9 million sq feet to 20 million sq feet,” said Kapoor.
“While an overall correction of 35 per cent is required to improve sales, South and Central Mumbai will need a correction to the tune of 40 per cent,” said Kapoor. Though not all realty experts may agree on that, the general sense is that prices will correct by at least 15 per cent in the next six months.
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