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Mumbai property sales registrations fall in Aug

Property sales registrations in Mumbai fell about 5% in August compared with July as buyers continued to resist purchasing houses in a sluggish real estate market.

Property sales registrations in Mumbai fell about 5% in August compared with July as buyers continued to resist purchasing houses in a sluggish real estate market.

On a year-on-year basis, too, registrations fell 2.4%. The absolute decline from the peak of May stands at 13%, a September 21 report by domestic brokerage firm Prabhudas Lilladher said.

Lack of project launches, dearth of options in the affordable housing segment coupled with high interest rates and developers holding on to higher prices continue to ail housing sales.

?The onset of the festival season could see a bit of cheer for residential sales,? said Kejal Mehta, research analyst (institutional equities), Prabhudas Lilladher.

According to the findings of real estate consultant CB Richard Ellis?s (CBRE) August 2012 report titled ?Market View India Residential?, the residential market in Mumbai witnessed subdued growth in the first half of 2012 in the back drop of high interest rates. While there was a decline in supply addition compared to the second half of 2011, the stock of unsold inventory increased during the review period.

South and central Mumbai, which offer premium residential options, witnessed limited supply during the first half of 2012. Developers adopted a cautious approach due to large inventory of unsold stock in these micro-markets.

Anshuman Magazine, CMD, CBRE, South Asia, said, ?While Mumbai continues to be a prime residential investment market, affordability and credit costs have become critical issues guiding residential demand in the city. High interest rates and weak investor sentiment have taken a toll on the sector. A downward revision of interest rates by the RBI might encourage buyers and investors to revive decisions.?

In a July report, Knight Frank India, another global real estate consultant, said the Mumbai residential market has an unsold inventory of 80,000 units which forms 37% of the total residential supply under construction.

?We were selling 80,000 units a year, now we are at 45,000. It?s a huge dip,? said Anand Narayanan, national director (residential services), Knight Frank India. Though he was quick to add that liquidity crisis is not as widespread. ?Many projects have become cash neutral in terms of the sales achieved. No economy can last a sustained period of downturn. Already interest rates are taking a U turn, which should boost demand soon.?

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First published on: 24-09-2012 at 01:30 IST
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