Mumbai: Considering overall liquidity issues and expecting further drop in prices for Homes, home buyers seem to just wait and watch for a while. Knight Frank reported that home prices in Mumbai, the financial capital of India, have seen a second consecutive year on year drop in prices.
Mumbai which features amongst world cities for it’s high property rates saw a 6.8 percent fall in residential property prices last year. This was the worst among eight Indian cities, according to a property consultant. Considering 5% weakened value last year was a first in a decade.
After the crisis like situation at ILFS group in late 2018, lending has taken a hit on a cautionary note. Home sales has been showing a ‘significant slowdown’.
Global cities like London, Hong Kong, Singapore, Sydney have witnessed price drop in prices due to Government Policies and Volatile Markets. Mumbai has not been isolated from the effect. At India level, the bargaining power has been shifted in favour of buyers with newer regulations including RERA and cash ban while keeping notorious developers at bay. This has been beneficial in improving transparency and accountability as against an erstwhile, developer dominated industry.
The liquidity crunch among non-bank financial companies in the second half hurt cash-strapped developers with few financing options left. “The liquidity crisis, if not resolved, is likely to keep the noose tight in the Indian real estate sector in 2019, hampering its growth,” Anuj Puri, chairman of Mumbai-based Anarock Property Consultants told Bloomberg Quint. “New launches are likely to remain muted.”
Most developers are seen developing affordable and mid range houses where takers are relatively higher. Considering prices have zoomed higher and higher in the past, consumers seem to be willing to wait and grab a better deal after the wait as home inventories pile up slow and steady.