As residential realty rates remain sky-high despite the abundance of vacant properties everywhere, the question being asked is: where is Mumbai’s real estate market headed? On one hand, developers argue that the prices will remain high despite all the talk of an overheated market. And on another, property consultants believe there is bound to be partial correction.
“I do not believe prices will come down”
But despite all the talk of an overheated Indian realty market, developers say prices are going to remain high. “Don’t blame us. We have told the government that the slow approval process will affect supply and, in turn, the prices since there is no letup in the demand,” said Boman Irani, secretary of Maharashtra Chamber of Housing Industry.
Government has to speed up approvals
“It took almost a year of discussions before the government allowed higher FSI in suburbs on payment of premium. While we will pass on the 2% to 5% discount of this FSI to consumers, I do not believe prices will come down. For that to happen, the government has to speed up the approval process and revoke urban land ceiling.”
Prices have to come down by 15% to 20%
Anuj Puri, country head of global property consultant Jones Lang LaSalle, said that while prices in completed projects may remain high, prices will drop by 20% in projects that are a year or two away from completion. “Yes, supply is being constrained due to statutory approval. This has resulted in prices increasing in completed projects. However, this is not the case with under-construction projects,” said Puri. “End users are justified in refusing to pay high prices for projects that are a year or two from completion because of developers’ poor track record. With their financial ability in question, end users wonder whether builders will complete the project and give the best quality in time. I believe prices have to come down by almost 15% to 20% in such projects.”
Tags: Indian developers, Mumbai prices, Property in Mumbai, selling property in India
November 8th, 2011 at 12:49 pm
If the rates are remains high it will not easy to buy the properties for lower class people. On contrary it will be beneficial for the property sellers and brokers to earn money.