With property prices at their peak levels, the city continues to see lower sales for the second month this year. Data available with the Mumbai registrar shows a 5% fall in home registrations last month compared to registrations in January this year.
With property prices at their peak levels, the city continues to see lower sales for the second month this year. Data available with the Mumbai registrar shows a 5% fall in home registrations last month compared to registrations in January this year.
The number has also fallen by a whopping 20% on year-on-year basis.
Industry analysts say the situation will only worsen. With the current decline in sales, a price correction in property prices is expected.
According to the data available with the Mumbai registrar, there were around 4,759 sales registrations in February. This is 5% lower from around 5,057 registrations witnessed in January.
On a year-on-year basis, sales registrations have fallen by 20.97% from 6,022 in February last year. Certificate sale, conveyance, agreement deed and apartment deed are the main components of this data.
Out of these 4,759 registrations, 879 were recorded for Mumbai island city, while the remaining 3,880 were for the suburbs. Registrations for the island city have fallen by 5.38% from around 929 in January. Registrations for suburbs witnessed a fall of 6% against 4,128 in January.
Pankaj Kapoor, founder and managing director Liases Foras Real Estate Rating & Research, stated, “The two main factors for this fall is that property prices have peaked out, which has created a gap between affordability and price. Interest rates have also increased from 12% to 15% and the loan to property value (LTV) ratio has also fallen from 90% to 80%. In such a scenario you do not see many buyers motivated.”
While the January registration numbers were the lowest since March 2009, and the February figures indicate the situation is expected to worsen in the coming month. “The registration data shows a six-month lag and I expect the situation to deteriorate further,” said Kapoor. “The price correction could be anywhere in the range of 10% to 35%,” said an analyst from a foreign brokerage firm.
“The developers have already softened while negotiating with customers, while the upfront prices continue to remain high. I think they will now try decreasing upfront prices as well. I expect a price correction in the range of 15% to 18%. However, it could be as low as 10% and as high as 28% varying with different locations,” said Samantak Das, national head, Research Knight Frank India.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}