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ShareAbhijeet Banerjee, marketing manager with a multinational company in Vikhroli, used to live in a rented apartment in Andheri since February 2008. But in April this year, when prices had dipped, he bought his own house at Nahur.
Like Banerjee, home seekers who were unaffected by job cuts and were sitting on the fence since 2007, plunged into the market earlier this year when prices dipped to more realistic levels. As a result, leave-and-licence registration data obtained from the registrar's office in Mumbai shows that since the economic recovery began, the number of rent agreements has fallen considerably as compared to last year.
From June onwards, rental housing leases have shown a decline of 22% to 38%, with the biggest downfall in August, when only 3,450 agreements were registered as compared to 5,577 last year. This translates into a drop of 39%.
Likewise, in September, 3,360 leave-and-licence documents were registered as compared to 4,705 last year, a drop of 29%. Though rental apartments are still in demand in the island city, data from the suburbs shows a huge fall in rent deals since May. A major reason for this is the availability of better choice in the island city at similar prices.
The drop is a reversal of the trend seen at the beginning of the year, when registration data showed a rise of as much as 71% in the number of agreements in January, February, and March.
Developers attribute this drop to the price-cut strategy that they adopted to attract end-users back to the market. Hari Prakash Pandey, vice-president for finance, Housing Development and Infratructure limited, said, "We are seeing mainly end buyers coming to buy at lower prices, and they pay 10-20% upfront, which is a good amount. Investors pay much less when booking properties."
A director with a leading international consultancy, who asked not to be identified, said, "In Mumbai end-user demand is very high, unlike in the NCR [National Capital Region] market, which is driven entirely by investor force."
