Flat sales dip as rates soar

The real estate market in Mumbai continues to remain stagnant as sale transactions are at an all-time low due to the high property prices. Naresh Kamath reports.

The real estate market in Mumbai continues to remain stagnant as sale transactions are at an all-time low due to the high property prices. Traditionally, property sales in the city go up between February and April, with March recording the highest number of transactions. But, this year even that does not seem to be happening.

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As per a research conducted by Prabhudas Lilladher, a financial services provider, home registrations in February have come down to 4,716 from 5,735 in the same month last year.

“People are waiting for prices to come down and hence are deferring purchase,” said Kejal Mehta, an analyst with Prabhudas Lilladher.

On Gudi Padwa, the Hindu New Year, property sales usually peak as it is regarded the most auspicious period to buy property. Analysts, however, discount any such possibility this year.

“The prices are so high that people cannot afford to buy even if they want to,” said Pankaj Kapoor, CEO, Liases Foras, a real estate research firm.

Builders, however, continue to put a brave front. “Prices have risen, but so have the salaries,” said Sunil Mantri, chairman, Maharashtra Chambers of Housing Industry (MCHI). But, Mantri is quick to add that some correction may be expected in a few areas in the city.

To add to the woes, even banks have tightened lending norms making home loans difficult and costlier to procure. “Loans are a big problem,” said Mantri. Even the civic body is not clearing any proposals with more than 150 such applications being rejected in recent times.

“Builders have a mindset not to reduce the prices till they are pushed to the corner,” said Pranab Datta, vice-chairman and managing director, Knight Frank India Limited.