Like any other real estate market, Mumbai’s property market has also witnessed several peaks and troughs over the last two years. But now the market is showing the signs of revival. Developers resorted to reduction in the size of apartments and came up with several offers and discounts up to 5-10 percent. As per the reports of JLL India as published by the Economic Times, cumulative sales of residential apartments rose by 28% over the last four quarters.
Unfortunately, during the first half of 2015, the number of new launches came down drastically by almost 25 percent. Due to comparatively higher rates the market was losing its luster among the end-use buyer which results in a pile of unsold inventory with the builders. They did not want to incur loss on reduced prices so they preferred holding supplies. This is, however, in the favor of those who had put their investment activities on hold waiting for price correction.
The reports of global real estate services firm JLL India suggest a revived scenario of residential real estate in Mumbai. Since the developers are focused on clearing their unsold inventory, the housing prices would not shoot up in the coming two to three years. Real estate price correction is already in place. This is evident from the fact that despite an annual inflation rate of 5 to 8 percent, housing prices have remained quite stable.
The stars are in favor of all those fence-sitters who had been waiting for the right time to make an investment. Interest rates are falling down, developers are also offering direct discounts and better payment plans to clear their inventory, affordability factor has also improved with reduction in the sizes of apartments. This has generated a sense of confidence among investors as well as end-users. The trend has started with a few new launches and is slowly covering the market on a broader perspective. The least affected would be ready to move flats in Mumbai.
The revival in buyers’ sentiments will also have positive effect on the shares of listed real estate development companies like Godrej Properties, Hubtown and Mahindra Lifespaces. Giant realty development houses have lined up new launches for the second half of this financial year; debt burdens on developers would also be eased by the time. The coming months will be the best for organized players of Mumbai real estate market. Time for avid investors to return to Mumbai’s property.
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Article Source: Economic Times