You could call it a buyer's aversion after a year that saw a price surge. Real estate industry experts say that mid-tier and high-end apartments are finding few takers, suggesting a pile-up or peaking of prices that could lead to a correction in the coming months.
Industry trackers say only apartments in the Rs 2,000 to 5,000 per square foot range are witnessing demand.
"Anything priced above is seeing fewer transactions," said Gagan Banga, CEO of financial services firm Indiabulls, which also has a real estate arm, adding that the lower range flats were also growing slower this year.
Mumbai and the National Capital Region (NCR) seem to be clearly in a slump.
"Most developers present in the Mumbai residential real estate segment have witnessed a decline in sales volumes in past few months. Luckily for us we are a pan-India company and we are seeing volumes in other cities," said
Rajendra Khetawat, vice-president at Godrej Properties.
Prices in most Mumbai areas have surged by 40% in the past year, and the average per sq ft price in the Mumbai
Metropolitan Region (MMR) is estimated at Rs 9,300 per per square. "The situation in the National Capital Region is similar and prices both cities could see a price correction of anywhere between 20% to 35%," said Pankaj Kapoor, managing director at Liases Foras, a real estate consultancy.
While some industry insiders say developers have more staying power than they did in 2008, others say debt-laden ones may be forced by a cash crunch to offload flats at cheaper rates amid difficult capital market conditions.
Some developers have offered over-the-counter 10% discounts, said a Mumbai developer, noting that this year also saw fewer new project launches on the auspicious Akshaya Trithiya day.
"In past two months demand is back but predicting price movements could be tricky," said Percy Chowdhry, director, Rustomjee Group, a Mumbai-based realty company.