Due to availability of inventory and price stagnation, only few takers are available for new homes in Mumbai and Delhi
few takers are available for new homes in Mumbai and Delhi
In Mumbai and Delhi, real estate developers are finding it difficult to get the buyers and they are facing worse condition because due to unaffordable prices are leaving only non takers for new projects. As per the statement of Anuj Puri who is Chairman and Country Head at JLL India, currently the real estate market is so sluggish and due to that inventory is increasing day by day.
While facing these situation most of the developers are trying to enhance their price for new projects. Samantak Das, Chief Economist and Director Research at Knight Frank India, stated that with the absorption of current rates new builders are trying to get their numbers back. However; price reflection is first sign fo to 20 per cent, stated by Anil Kothuri who is Presidentr bear market in real state sector, whereas; the price is remaining flat for the projects which are in existence from past two years. Some experts are saying that investment in other domains can provide good returns.
Why only few takers are available for new projects?
`Howevver the picture of real estate market is not so much different from Mumbai city as the current supply is higher than current demand. Mumbai is the only place where people can still find the pre-leased commercial properties. Buyers are still waiting for low interest rate however due to correction of price in real estate market they could have to wait for some more time, but after holding the property for one to two more years now investors and builder both are losing hope as well as patience and because of that now they are ready to offer small offers and discounts in the form of different things such as; freebies in flash sales, free parking, low interest of loan, attractive payment plans, free stamp duty and registration and more.
Whereas; with better research you can also find the few builders who are offering big price discounts for those who are buying in bulk because discount largely depends on kind of area, location and property. In big deals, because of economies of scale, builders are ready to provide 15 to 20 per cent discount for those properties which are under construction. But discount is still small that is 5 to 10 per cent for those properties which are ready for possession and available in secondary market. All the differences in price and property trend is differ as per area too. In the absence of large supply there are less price pressure in the western suburbs, but for central Mumbai areas such as; Parel and Worli the price pressure is more.
How long the latest trend will continue?
Another most important question is that till what time the recent property trend will continue? Changes in policy by the Maharashtra government can add a lot of supply in current market and then there will be possibility that real estate prices will become more affordable, but it will take some more time. Real estate market in Mumbai had seen very much price correction in between the year 1995 to 2001; however the prices are crashed by half in many pockets.
What end users and sellers can do?
While analyzing the recent property trend you can classify the real estate sector into two categories; end uses and investors. The correction has just started because there are no room for panic selling in real estate market, so buyers who are waiting for right movement to buy property should wait for 1 to 2 years, but still end users are restricted by many other factors such as; birth of kids, financial capability, marriage, getting a better job, and more.
