Property transactions in Mumbai slow down as homebuyers hunt, wait for good deals

Not worried that rates will rise suddenly, people in Mumbai Metropolitan Region take their time to explore and decide; developers concerned

With develops offering a variety of discounts and sops, homebuyers in Mumbai have a lot to choose from, and this is slowing down property transactions, much to the unhappiness of builders.

Buyers have a lot of options, so they are taking a lot of time — at least three to four months — to conclude deals, say builders. (HT File Photo)

Buyers have a lot of options to explore these days, so they are taking time — at least three to four months — to conclude real estate deals, say builders.

Ashok Mohanani, chairman and managing director, Ekta World, said: “Buyers now visit many projects before taking a decision. They have got a lot of choice and offers now.”

For instance, said Mohanani, a buyer looking for a flat in Vikhroli will also check out flats in other localities nearby, such as Mulund, Chembur and Ghatkopar, and this delays the whole process.

Manohar Shroff, vice-president of Maharashtra Chambers of Housing Industry (MCHI), agrees. “Many buyers feel that prices will come down further, so they are taking their own time to strike deals. There’s a lot of bargaining and negotiations taking place,” he explained.

A recent Knight Frank report said that faced with the slowdown and depleting sales, builders have, for the first time since 2010, reduced real estate prices by an average 11%-12 % in the Mumbai Metropolitan Region (MMR). Some builders have decreased rates by up to 25%. Almost 80% of the builders have special offers and schemes such as waiver of stamp duty and registration fees, no floor rises, 24-month rent assurance, as well as gifts.

Developers in the MMR are saddled with a huge inventory, with the number of unsold apartments running into around 2.67 lakh, which includes one lakh home units in Mumbai alone.

Liases Foras, a real estate research firm, said there is a “depression psychosis” at work. “With the slowdown, homebuyers are assured that prices will not increase for the next two years at least, and so they are not in a hurry,” said Pankaj Kapoor, CEO, Liases Foras. Previously, people would book flats in the pre-launch stage itself, but that’s not the case anymore. “Buyers used to fear that rates would go up if they did not book fast, so deals would get concluded quickly. But now, buyers feel that they can get the best deal by waiting.”