Residential property prices in some parts of India are close to the peak levels of 2008 but could fall by 10 to 15% in some areas in 2011 as buyers refuse to pay higher prices, according to analysts.
The latest analysis from property consultants Jones Lang LaSalle shows that since the height of the real estate market in 2008 prices have fallen by 25 to 30% in areas such as Delhi and Mumbai. But now they have shot up again and reached similar levels.
According to JLL India Chairman Anuj Puri there is not much slack in the market and rising prices in 2011 could affect demand. ‘Affordable housing will continue to do very well in the coming year,’ he said. He added that demand for mid-segment residential units in Mumbai is far greater than available so some prices increases in this sector are expected in 2011.
‘The residential transactions have been falling continuously, but I don’t think prices would drop drastically. It would fall by a mere 10 to 15% at the most, but more importantly, prices would stabilise now and capital value hikes wouldn’t be so rampant anymore,’ said Ambar Maheshwari, director of real estate advisory services firm DTZ.
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