Property sales registrations in Mumbai are down a sharp 30% year on year in April, hitting a new 23-month low. According to data compiled by Prabhudas Lilladher, registrations in April numbered 4,917, which was lower by 16% compared with the registrations in March 2011.
The Mumbai real estate market had got off to a weak start, with registrations falling 22% year-on-year in February, with 4,716 properties registered. In March, while the number of property sales registered was 5,852, it was nonetheless 30% lower year-on-year. In January 5,085 sale registrations were made.
“The transactions volume has been coming down both because of high asset prices and high interest rates,” said Anuj Puri, country head, Jones Lang La Salle.
Anand Narayana, national director-residential, Knight Frank India, said, “Sales have been sluggish and developers have been offering buyers some small discounts. There is a general perception in the market that prices will correct and therefore, buyers are holding back their purchases.”
Developers say the downtrend in sales could touch further lows in the upcoming monsoon season, which is traditionally a lean season in the property market.
“The slowdown is more pronounced in the mid-priced and affordable segment since customers are staying away, awaiting a correction in prices. However, with the high input cost of raw materials, it is difficult for the rates to come down,” Uday Dharmadhikari, CEO, Usha Breco Realty told FE.
However, all is not lost as they feel the trend is likely to continue only till Diwali, after which things should look up as festival seasons kick in demand for various assets. “The Mumbai market has been sluggish because of the rapid price escalation last year, but I think things will improve in the coming quarters,” said Pirojsha Godrej, executive director, Godrej Properties.
Meanwhile, sector analysts fear that the recent increase in interest rates by the Reserve Bank of India (RBI) could accelerate the downtrend in property sales.