Is Mumbai going to see a correction to improve demand?
Mumbai: According to Real Estate experts and reports, Mumbai market will remain stagnant in the quarter April – June 2013. Almost for the last one year, buyers and investors are delaying to invest in real estate due to the rising construction cost, increased interest rates and delay in approvals because of new DCR.
According to the survey ‘Emerging trends in real estate 2013’, Mumbai has slipped to 20th position from 15th in the list of investment destinations in the Asia Pacific region. This has happened majorly because the foreign investors are worried about the continued decline in the Indian Rupee, which has reduced 6.27% in the last financial year against the US dollar. Moreover, the local conditions are also not supporting the real estate market. RBI has tightened the norms of lending so the banks are also watchful in lending money.
Maharashtra’s realty sector has seen a fall of 55 % in the last financial. One more factor is that the infrastructure developments in Mumbai are very much delayed and are expected to be completed by another 8 – 10 years.
Since the investor is not active so it is the end user’s market, but they are waiting for the good opportunity. According to the real estate experts, developers will have to make some wise price corrections to improve the market condition. Lodha developer has sold its new upcoming project, Blue Moon through IPO model. The pricing for the three or four Bhk was kept almost 45% lower than the basic ticket price in the locality. They got the tremendous response and is the best example to conclude that if the developer gives quality product on the right price he will find buyers.
| Localities | April – June | July – Sep | Oct – Dec | Jan – March | Increase in property price in Fiscal 2012 |
| Mulund West |
11,608 |
11,958 |
12,054 |
12,594 |
8% |
| Chembur |
13,640 |
14,184 |
14,758 |
15,308 |
12% |
| Dahisar East |
7,727 |
8,710 |
8,760 |
8,771 |
13.50% |
| Dahisar West |
10,219 |
10,861 |
11,262 |
11,201 |
10% |
| Ulwe |
4385 |
4292 |
4315 |
4788 |
9% |
| Thane East |
9,670 |
9,127 |
11,073 |
10,309 |
6% |
| Panvel |
4,066 |
4,110 |
4,225 |
4,270 |
5% |
According to the Assocham report, the Mumbai market will only see improvement in the second half of the fiscal 2014, which will be due to reduced interest rates, piled up demand for residential units and improved economy.
If we have, a look at the price trends in the last financial year one will observe nominal appreciation of up to 10% in upcoming areas like Panvel, Ulwe, Thane East, Dahisar West, Mulund West etc. Buyers should negotiate with the builder as they can get some discounts due to sluggish growth.
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