Mumbai Flat Prices: A Waiting Game
Brokers and real estate consultants are advising potential homebuyers in Mumbai to hold off on purchasing flats, anticipating a steeper decline in prices. While acknowledging a marginal decrease, they believe the substantial reduction is yet to come. This contrasts with the perspective of developers, who assert that prices have already stabilized.
Market Dynamics and Predictions
Real estate consultant Sandeep Sadh, CEO of Mumbai Property Exchange, points out that builders continued to increase prices throughout the monsoon and Diwali seasons last year, despite early discussions of a price correction. "Only after November did they start decreasing prices, marginally. As of January, buyers want a reduction of more than 35%; they should not buy for another six months," Sadh advises. He describes the current scenario as a "farce of a market" with a disconnect between builders and buyers, predicting stagnation unless substantial discounts are offered. Sadh notes that only in the distant suburbs, where supply surpasses demand, have developers begun reducing rates by 10-25%. Data compiled by the portal indicates that current average prices in Mumbai are comparable to those of last September.
Ishwar Kakkad, a broker operating in the Dadar-Worli area, echoes this sentiment, suggesting it's currently more advantageous to sell than to buy. "A price rise can be called healthy if it happens at the rate of inflation, say about 8 – 10% per year. But in the last three years, prices have increased by about 400%. Right now builders are willing to negotiate depending on their urgency; an actual price cut will come when builders openly announce one," Kakkad explains. He anticipates an eventual 40% price drop, but estimates it will take at least three months to commence.
Buyer Hesitation
Potential homebuyers like Akshay Mishra, who works for a multinational financial firm, are exercising caution. Mishra notes that the price of his rented 440-square-foot apartment at Seven Bungalows in Andheri has decreased marginally, from ₹45 lakh a year ago to ₹42 lakh now. This translates to a reduction of less than ₹500 per square foot. Mishra, who had been planning a purchase for over a year, has now postponed his plans.
Developers' Stance
Developers, however, offer a counter-narrative. Dharmesh Jain, chairman of Nirmal Lifestyle and vice-president of Maharashtra Chamber of Housing Industry, maintains that the market has undergone the anticipated correction. "We clearly feel the prices have stabilised and that there would be no more decrease in rates. Developers haven’t increased their rates since March 2008; in the last three months, these rates have fallen by 5 – 20%," Jain states.
The differing perspectives between brokers and developers create uncertainty in the Mumbai real estate market, leaving prospective homebuyers to weigh the risks and potential rewards in this evolving landscape.