Property prices seem to be going up steadily in India's metropolises - but only in new projects. In the resale market, prices have been stagnant since 2010, say experts.
"If there is no actual price correction, there would be a time correction - that is, price will remain stagnant for a long period," said Pankaj Kapoor, Liases Foras, a real estate research firm. "While in new properties developers are artificially jacking up prices, resale property prices have been the same since 2010 in all metros."
In Mumbai, there has been 25% decline on an average in the registrations, year-on-year, since 2010. Industry experts said this denotes that people are not buying properties at inflated prices demanded by developers. While, national capital region (NCR), has fared a shade better than Mumbai, resale properties prices have continued to stay stagnant for past two years here as well.
According to a latest report by Jones Lang LaSalle India, real estate services firm, there has been 2-3% average rise in the prices of residential property in the first quarter of 2012. Mumbai witnessed worst with capital appreciation dipping to 0.8% in first quarter of 2011. With an exception of two quarters, appreciation has been below 3% across metros since 2010, the report states.
"I wanted to sell a 1BHK in 2010 and I expected to fetch around Rs. 50,00,000, the deal did not go through," said Rasik Patel, 54, a diamond trader. "After that I had postponed the plans, but this month when I inquired about the price of my flat, I was surprised that the price has been same."
"There are only desperate buyers and desperate sellers at this time in the market. Investors know that the prices are not going to appreciate for two years now, and so it is better to sell the property at this price point," added Kapoor.