The triple effects of demonetisation, GST implementation and slow economic growth has led to a decline in real estate prices in Mumbai.
Real estate consulting firm Knight Frank India in its half yearly report has confirmed this trend. It said, for the first time in a decade, Mumbai witnessed a decline in quoted prices. “The weighted average prices were down 5% YoY in 2017,” it said.
“For the first time in this decade the Mumbai market has experienced a drop in residential prices. Unlike the conventional narrative developers cut prices to offload their unsold inventory,” Dr. Samantak Das, Chief Economist & National Director – Research said.
“The base price has come down by 5% which translates into an effective price benefit of 11-12% for buyers. This includes bouquet of incentives such as waivers on stamp duty, floor rise and assured rental schemes,” he added.
New project unveiling in H2 2017 plummeted by 23% YoY as the focus of developers shifted towards completing existing projects. “From an annual perspective 2017 saw 32% fewer launches YoY and new projects and same was down by a staggering 83% from peak in 2010,” as per the report.
Developers were offering bouquet of sops such as 24-month rent assurance, stamp duty waivers, no floor rise charges and other preferential location charge and gifts, it said. “Collectively discounts add up to 11–12%,” the report said.
Unsold inventory in 2017 came down by 25% YoY indicating a healthier QTS of 7.9 quarters as compared to more than two years until the end of 2016, it added. In terms of sales the Mumbai market recorded 19% uptick in H2 2017 over the demonetisation-hit same period last year, however overall sales volumes reflect a declining pattern.
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