Unsold properties piling up in Mumbai, developers likely to reduce prices
Mumbai- Due to a reducing number of property bookings, the inventory of unsold properties in Mumbai is piling up which is further forcing the developers of the city to decrease property prices.
According to real estate consulting firm Knight Frank, the number of unsold inventory of the real estate projects in Mumbai has increased by 11 percent to 83,000 at the end of December 2012, from 75,000 units in December 2011.
The developers were reluctant to cut down rates till recently, but have now started feeling the heat. It is observed that few developers have already softened prices while many more have started planning on rate cuts on their properties, adds the report.
The properties in Mumbai witnessed steady rates throughout 2011 and in the beginning of 2012, as the demand was low and supply too was lower. But things changed when the number of launches increased. The realty market felt it difficult to maintain the equilibrium with same price levels.
For long, the residential market of Mumbai has mainly grown dense in the north of the Mumbai Metropolitan Region. Around 62 percent of the total units under construction are now concentrated in Thane, Navi Mumbai and Peripheral Central and Western Suburbs, compared with 57 percent in 2011.
As per the Knight Frank report, realtors are eagerly looking to tap the largest group of buyers who are looking to invest in apartments priced upto Rs 75 lakh.
More than 35 per cent of the planned launches in 2013 will be in micro markets of central suburbs and western suburbs which is likely to put further pressure on unsold inventory and prevailing prices.
The report states that the maximum number of launches in 2012 will be observed in central suburban corridor from Sion to Badlapur and consequently highest unsold inventory levels in the market.
Around 10 percent fall has been observed in prices of properties loctaed in some South and Central Mumbai locations like Parel, Lower Parel and Mahalaxmi, over previous three quarters while prices in Navi Mumbai, Thane and the peripheral suburbs of central and western Mumbai have either been stable or have shown marginally upward trend.
Developers seem to be eager to clear the luxury projects inventory first. They are ready to negotiate property rates in the premium segment, reducing prices substantially in favour of a sizeable up-front payment.
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Luxury projects, Mumbai, Mumbai Metropolitan Region, Navi Mumbai, Properties in Mumbai, property bookings, Property Prices, Real estate projects in Mumbai, residential market of Mumbai
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