Developers in Mumbai and Bangalore have finally resorted to correcting property prices in order to enhance sales. However, experts believe this could be temporary and fence-sitters should make the most out of the situation.
In the wake of piling residential stock, developers in Mumbai and Bangalore have been forced to slash sale prices. Home buyers in almost all metro cities have refrained from purchasing homes due to overbearing property costs. Their wait has finally been rewarded with property prices in two of the most economically strong cities being corrected. This was reported in the latest report by Cushman & Wakefield, according to which, the launch prices of mid-segment homes in Mumbai, Bangalore and Delhi NCR have witnessed a price correction owing to declining sale volumes.
Confirming the downfall in Bangalore’s market, Pratik K Mehta, MD, Unishire says, “Bangalore did witness a price correction to a small extent, especially in certain selected pockets of South East region. However, the dip in Bangalore’s property prices has been minimal in comparison to other metro cities. The city has always maintained its stability in prices and housing demand owing to the presence of end users in the market. Nevertheless, the overall sentiments that prevailed across the country impacted Bangalore’s home buyers too. This resulted in stagnancy seeping into the sale volumes, leading to liquidity constraints. This forced developers to slash property rates in order to attract buyers.”
A similar story unfolded in Mumbai, where exorbitant prices kept home buyers wary of purchasing a property. Rohan Agarwal, MD, Geopreneur Group says, “Mumbai has roughly witnessed a 15 per cent price correction, especially in the mid-income segment category. However, this is not true for suburban areas of Navi Mumbai and Thane as housing demand in these regions is still surging high in comparison to supply.”
So will it actually help in pushing sale volumes up? Experts say, it will definitely have a positive impact on buyer sentiments and sale conversions. However, it could be temporary as surge in sales might again lead to swelling up of property rates. Agrawal says, “This is a common business cycle. As buyers return to the markets, there could be a surge in property prices all over again.”
Does that mean it is the best time to buy a property? While experts maintain that anytime is the best time to buy a property, in this case, it surely stands true. Adding further, Mehta says, “Bangalore’s market is ruled by end users, and thus, it is highly realistic and not speculative in nature. This leaves it with a limited margin for price depreciation. In the long run, land prices will only appreciate coupled with increase in construction costs, which will only lead to realty prices going further up. Thus, now is the time for fence-sitters to take an action before it is too late.”
While developers insist that this is the best they could have offered in the current scenario, a lot of hopes are being pinned on to the Union Budget 2016-17. This mega-event, which holds immense potential to impact the real estate markets, could bring about policies which may lead to further reduction in home prices, or vice-versa. Well, a little risk is definitely what it takes to make it big on the investment front.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.