After a one-year period starting in the third quarter of 2009, which saw a strong recovery with a record 40%-plus increase in prices, the Mumbai residential real estate market has been seeing a slowdown over the past two quarters across various micro markets. The past six months have seen the return of negotiability in asking prices, and saw the return from a sellers’ to a buyers’ market . Both registration data and home loan disbursals are indicating a distinct slowdown. The number of apartments being sold in the first quarter of 2011 is considerably lower than in the corresponding period of 2010.
Developers who were selling their entire projects in a few weeks are now taking months to sell their unsold stock. Many home buyers are playing the waiting game, anticipating a further correction. The key reasons behind this slowdown are higher prices, higher interest rates impacting affordability, lack of liquidity, scams diluting investor sentiment – and, to a lesser extent, excess supply in a few micro markets. Any slowdown in the economy has not been a key criterion. Many developers and agents admit that sales have slowed down. Gone are the days when large numbers of apartments were sold during the launch itself . The trend of short termspeculators booking apartments at pre-launch or launch prices and selling them a few months later at higher prices (as witnessed in early 2010) has reduced considerably. Some of the other trends witnessed over the past six months include developers offering significantly lower rates to customers willing to cough up a 30-40 % down payment.
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