A lull in Mumbai’s property market over the past nine months seems to have brought developers to the negotiating table.
Similarly, property investors who faced shrinking returns from 25 per cent over two years to 5 to 7 per cent now are believed to be exiting from blocked property in search of alternative modes of investment -- similar to the trend happening in the Delhi region over the past six months.
So, if you are in need of a house, this is the right time to bargain hard and grab the best deal.
“Having realised that investment in property is no longer lucrative, investors have started offloading at a discount. Though developers are still desperately trying to hold on to the price line, residential realty prices, which were recently stable, have started softening in Mumbai,” said real estate consultant Sunil Bajaj, without quantifying the percentage of the price fall.
But developers do not agree. “Prices are not going to fall. In fact prices have appreciated by 5 to 7 per cent in some pockets over the past few days and the number of inquiries has increased soon after the drop in interest rates,” said Anand Gupta, Chairman of the Builders Association of India.
The hard-nosed developers’ community, though still insisting that prices would go up due to the vast demand-supply gap, has started offering freebies to prospective buyers to bring back the momentum into the market.
So, you may benefit a few lakhs if you bargain hard. The freebies include a furnished house, a fully furnished kitchen, a three-box car, gold and waiver of stamp duty and registration fees. Some builders are also offering discounts during bookings.
“Such marketing gimmicks were always there and it differs from developer to developer. Rather than giving a discount some builders are offering freebies to outbid the other. That does not mean the prices are falling,” BAI’s Gupta said.
He added, “There is a huge shortage of housing stock in Mumbai and in such a situation people should look for affordable property in Thane, Kalyan and Bhiwandi regions.”
According to Gupta the demand from home buyers would pick up in the coming festive season. But property does not sell like sweets during the festival season as it is purely need-based and involves huge amount of money -- about Rs 50 lakh in Kandivli and more than Rs 75 lakh in Andheri.
“This is the right time to buy or prices will go up. New projects are hardly coming though there are several proposals. We don’t expect any dramatic change in the policy that would release extra land for development,” said Vicky Oswal, Director of Oswal Realty.
“The Slum Rehabilitation Authority (SRA) schemes have come to a standstill. The Transfer of Development Rights (TDR) and land prices are going up steadily. So, where is the question of reducing prices when the demand is still very high,” questioned Oswal.
He added, “The economy is doing well and people have money to buy. There is enough demand from NRIs and MNCs who are expanding their base here. The middle class may be finding the rates unaffordable but townships are still attractive for them.”
This may be true but the salaried class that once fueled the realty boom in the city seems to be moving out.
“Affordability is a major question in the Mumbai market. A large number of house buyers have shifted to Navi Mumbai, beyond Thane and even to Pune in search of affordable housing and quality life. This migration is bound to have an impact on the Mumbai property prices,” said Bajaj.