A recent report by property consultant Knight Frank India reveals that Mumbai ranked 24th among 41 international cities with 1.1% price rise of luxury homes in the year ended March 2017. Mumbai is the only Indian city holding on to a positive price trend as far as the luxury residential segment is concerned.
But not everything is fine! The cloud is looming large on this segment for some time now and Mumbai market is not any exception.
A recent report says around 1 lakh high-value apartments in Mumbai Metropolitan Region remained unsold in the last one year or so. The cumulative worth of the unsold inventories would be around 2.5 lakhs crore, as reported by Financial Express.
Among Indian cities, Delhi ranked 35 and Bengaluru ranked 29 in the same survey and both showed negative price growth in the year ended March. Though Mumbai showed 1.1% price growth but the research shows the price trend recorded in prime housing segment is on a declining path.
The prices of ready-to-move in luxury homes in certain areas of Mumbai including Worli, Lower Parel, Bandra etc. fell as much as 10-11% in the past few months after demonetization struck in November, 2016. One could also notice that where there is a pile-up of completed projects belonging to high-end segment, the builders are willing to slash rates quoted previously. Even the resale luxury property segment showed corrections and reduction of rate up to 5-6% in certain pockets of Mumbai.
For under construction properties buyers are willing to wait longer and are expecting better deals, lesser than the quoted price, while many developers are holding on to their prices as market hasn’t seen any significant corrections in terms of input cost. As a result stagnancy is occurring and closures of deals are taking significantly longer time.
The market for high-end homes is definitely narrowing and the scenario is becoming favorable for the buyers, be it the affordable segment of the premium sector. Customers are still deferring purchases, launching of new luxury projects has taken a hit and RERA has been employed to safeguard customers’ interests and to streamline real estate transaction.
If you are home-buyer, this is how you are going to get benefitted by RERA
However, there will be a handful of developers who will benefit from the changed scenario. As many fly-by-the-night developers will exit from the competition or sit on the fence for a while, the confident and established players who already have a portfolio in this segment will still be able to sell as going forward selling of luxury properties will need strategic intelligence and a solid brand image.
The inventory might take up to five years to clear out, experts believe. Demonetization has surely hit the negative image of Indian real estate indus try and has successfully curbed sidetracking black money into luxury real estate properties, to an extent.
This is why the luxury housing segment is the most impacted, compared to affordable housing. Demonetization and RERA definitely have changed a lot of things for the industry and now it’s to be seen whether or not market shows definite signs of recovery in the latter half of 2017.Authored: 9amstories editorial
We will send you breaking news right
to your inbox
Read our latest news on any of these
Dream Villas that will keep you captivated for life! Designed by Sussanne Khan
In the lap of Sahaydris there lies the quaint White Villas, by St. Angelo’s VNCT Ventures. There are luxury homes, there are lavish apartments and then there is White Villas, exclusive designed by internationally acclaimed designer Sussanne Khan, which is bound to keep you in awe forever.