Apartment registrations in the metro fell by 25% in May on a month-on-month basis
In Mumbai, registrations of residential apartments fell 25% in May, on a month-on-month basis, to 5,337. In April, the metropolis reported total transaction of 6,000 apartments.
According to a report by brokerage firm IIFL Research, a major percentage of residential realty sales are contributed by suburban Mumbai (beyond Bandra, in the western suburbs). The entire year-on-year growth in Mumbai's residential apartment registrations in calendar year 2009 was driven by the growth in the suburbs. There is a sharp fall of 26% in residential apartment transactions in the suburbs to 4,300 apartments in May 2010 from more than 6,000 apartments sold in April 2010.
Around 17.7 million sq ft of new projects were launched during the calendar year 2010. For the quarter ended March 2010, prices have gone up further by 15%-20% and sales are down by 25%-30%. The skyrocketing prices of properties are leading to low sales. Earlier, Moneylife had reported (see: http://www.moneylife.in/article/8/6400.html) on how developers have started offering discounts on properties as inventories are piling up. The real-estate market has already shown the first sign of reduction in property prices.
"I don't think prices of properties will rise any more. Developers would either hold on to the prices or reduce them," said Pankaj Kapoor, founder, Liases Foras, a real-estate research firm.
Moneylife has been constantly writing that high prices would affect sales and the registration data portrays the same picture. Given the rate at which real-estate prices are shooting up, buyers are not willing to shell out exorbitant amounts. The weighted average rate of the unsold stock (as of December-end 2009) was 61% higher than the weighted average rate of the properties sold in 2008-09 (in the Mumbai Metropolitan Region), according to a study by Liases Foras. This reflects the inherent inefficiency in the market.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
Hope in future a common man can dream to buy a home
To me a sensible decision for them shall be to bring affordable housing, and instead make profits from high turnover, so that instead of investors, the end users buy the flats in their project.
Ripon Malhotra
FCA., LL.B.