Mumbai residential pricing trends

Q: Mumbai property market in 2015 started with a lot of hope, but the year did not play out as anticipated partly because of pricing.

Shantanu Kumar, Mumbai

24th December 2015

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Replies (3)

Hi folks,
Good discussion!!!!
But these reduction may not look so attractive enough for buyers to change their buying decision. May be it cab be changed in long term.

Developers are interested to reduce their inventory level, and are offering discounts and better deals. This would definitely attract buyers and investors.

Pranab Malakar,

24th December 2015

Comment

At the same time, interest rates on home loans offered by banks are coming down even if not to the expected figure, then still enough to give a definite advantage to home loan seekers.

pradyumanapte, Mumbai

24th December 2015

Yes, we often talked about the word ''affordability'' but if we look at the price, the cost of a home should not exceed about 5 yrs. of combined annual household income. Anything above that breaches the affordability barrier. Also, it is the affordable housing segment that is driving most of the demand in Mumbai, and such housing must necessarily be priced either under Rs.30 lakh or between Rs. 30-65 lakh.

Rishi Dev,

24th December 2015

Comment

I appreciate it. But this situation cannot change overnight, as the developers started these pricier projects now after seeing economy, foreseeing potentially robust demand. The economic slowdown over the past 2 yrs. put paid to those projections. Price-sensitive buyers have been playing the waiting game, waiting for prices to come down before they invest.

ajit pandey,

24th December 2015

The options are clear, either wait for the economy to grow and buyers to be more comfortable with paying high prices, or turn to discounts and innovative financial structuring to cause sales, recover investment and bring in liquidity for further projects. Most builders in Mumbai have chosen the first route, but those without deep pockets have changed to the latter.

Rishi Dev,

24th December 2015

But in recent time, there has been a price reduction to the tune of approximately 0.95% in MMR and 3.25% in Mumbai. The average per-square-foot has reduced from Rs. 13000 to Rs. 12800 in MMR, while in Mumbai it has dropped down to Rs. 19600 from Rs. 20100.

ajit pandey,

24th December 2015

Yes, as per records, the unsold inventory in the Mumbai Metropolitan Region stands at a huge 77000 apartments. It will take almost 11-14 quarters to clear off this inventory against a healthy expected cycle of 4-6 quarters. Only about 3.5% of this inventory is completed or ready for possession.

Rishi Dev,

24th December 2015

Comment

But people are blaming on slowing demand while the reality is that about 70% of the unsold inventory is priced Rs.1 crore and above. If we compare this to the average annual household income of a Mumbaikar, which is only Rs. 7.5 lakh which gives a clear cut indication of the slowdown.

Vivek Kulkarni,

24th December 2015