Mumbai Sees Lowest Sales Registrations in 45 Months
Mumbai saw the least property sales registrations this September in the last 45 months since 2010. The total property sales registered from September 2012 till September this year fell by 8.6% on a year-on-year basis, to approximately 4,100 registrations.
Year-on-Year growth goes down
The Mumbai realty market registered a growth of 11.2% sales from January to September this year compared to same period in 2012. There were a total of approximately 48,400 sales from January to September this year compared to 43,500 during the same period last year. In fact, the first half of 2013 had also registered a year-on-year growth of 16%. However, post September, the market has considerably slowed down registering a year-on-year decline of 8.4% in this month.
The growth in sales registrations during the first half of 2013 can be attributed to the number of new project launches following clarity on DCR (development control rules) after over a year-and-a-half. However, sales slowed down drastically later due to change in customer sentiments. There were several factors that affected customer sentiments.
Sales registrations fall due to customer sentiments
There are three primary factors that affected the customer sentiments which led to fall of sales registrations. The first one is the fall in the country’s GDP. The country’s GDP growth was just 4.4% in the second quarter of this year, the slowest since the first quarter of 2009. The country saw a loss of about 2 lakh jobs across different sectors in the last 6-12 months according to a dipstick survey conducted by Financial Express in September. The slow economy has created fewer jobs. Fear of job loss has shown an impact on sales registrations. According to Naredco (National Real Estate Development Council) officials, Mumbai may see a 5-10% change in registrations either in a positive or negative direction.
The second reason for the fall in sales registrations is the fall in the value of rupee. The rupee value fell non-stop since April and stopped only at the end of August. In fact, rupee slipped by about 46% in the last two years to hit an all time low of Rs. 68 against the US dollar in August. The RBI has now taken some steps to stop the further falling of rupee. But the fall in rupee already affected customer sentiments.
Rising costs in Mumbai is another pain. Mumbai is proving to be one of the most expensive cities for real estate in the world. Rising costs have put prospective buyers on the back foot who are looking for better deals and affordable houses. This has led to pile up of unsold inventory. According to data from Jones Land LaSalle, Greater Mumbai has close to 48 months of unsold inventory against the normal levels of 15 months.
Industry positive about sales registrations
Though the customer sentiments seem down, real estate experts are hopeful that the situation will improve. According to them, there are genuine buyers who are either waiting for better prices or making purchases. Customers have more options and can negotiate better deals with developers. This will eventually lead to more sales.
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