Coming Festive Season Prices of New Residential Property could Fall
Prices of new residential property could fall 10-15% by Diwali. But leading builders say supply has to increase for prices to come down. The RBI’s rate tightening has resulted in developers not having funds to complete projects, and hence the supply will remain in check while demand is still intact.
A 10% price correction is likely in Mumbai and Delhi around the festival season, as that is the only way to revive sales. However, a consensus seems to be emerging among many market participants that the crucial Mumbai and Delhi-NCR markets will correct soon.
Many bank officials and investors ET spoke to say they have increased monitoring of realty projects and are trying to persuade developers to clear inventories. According to data compiled by Liases Foras, a real estate research firm, inventory in the top six property markets in the country has continued to rise over the last few quarters except in Hyderabad.
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