Property prices likely to be stable in Mumbai due to high price points

Property prices to be stable in Mumbai

Stable price scenario can be expected for property prices in Mumbai in the foreseeable future due to the high price points. However, Bangalore, Chennai, Pune, and Kolkata may see marginal appreciation due to increased demand.

In second quarter the union government had announced friendly measures in the 2014-15 budget for real estate sector. With the general improvement in overall sentiment and optimistic announcements for real estate BSE Sensex and the realty index showed upward trends.

What is termed as a positive move, the Reserve Bank of India (RBI) allowed banks to issue long-term bonds with a minimum maturity of seven years to raise funds for lending to long term infrastructure and affordable housing projects. Home loans up to INR50 lakhs (INR5 million) for houses costing up to INR65 lakhs (INR6.5 million) located in the six metropolitan centres and INR40 lakhs (INR4 million) for houses costing INR50 lakhs (INR5 million) in other cities are eligible for home loan under this scheme.

A rise in transaction volumes was witnessed in cities such as Bangalore, Chennai and Pune and a number of projects were launched. In cities such NCR, Mumbai and Kolkata, there was an increase in enquiries for residential properties but transaction volumes remained stable and developers continued to promote their unsold stock by offering innovative payment plans. “We anticipate a stable price scenario in cities such as Mumbai and NCR due to the high price points. However, Bangalore, Chennai, Pune, and Kolkata may see marginal appreciation due to increased demand. Most of these cities may witness the launch of affordable projects in the coming quarter as a number of developers are planning to launch affordable housing projects in line with the government agenda focusing on this type of housing.