Property registration in India’s biggest real estate market Mumbai continued its slide in August and touched a twenty-seven month low. This drop comes in the backdrop of rising interest rates and real estate prices which hasn’t seen any significant correction despite the slump.
In August, property registration offices in the city declined for the twelfth successive month to 4,611 deals, down 25% from a year ago, said brokerage Prabhdas Lilladher in a report.
Although leasing activity continued to show year-on-year growth of 4% at 8,102 deals, on monthly basis, after a long time, this also saw a drop of 16%.
“Lease registrations have shown a sharp dip this month, we would need to see data in the months ahead to see if this is a reversal of the upward trend or just a monthly blip,” the report said.
Sales registration is likely to remain low in September as monsoon is usually a slack period for property market, and it will be interesting to get an update around festive season of Dusshera and Diwali, a realty broker said.
However, brokers also added that new launches that are likely to be lower this year may revive the market only if any meaningful discounts are offered.
Kruti Jain, Director, Kumar Urban Development exudes optimism when she says after 15 days of Pitrupakcha, the Shubh Muhurat of Navratra starts after Ganesh Festival. During this festive season, home seekers who have plans to purchase will opt to buy or book homes. In India, home buying has always been a market that has been primarily driven by sentiment and these sentiments are high during festival season. And Navratri is very important and popular festival of India. From our past records these has been always a good time for home buying.
“The real estate sector in the city is not much disturbed by the Reserve Bank of India’s (RBI) announcement to increase the repo rates. Builders feel that increase in interest rate of home loans due to hike in repo rate would not adversely affect the sale of flats during the forthcoming festival season. It’s a market trend if repo rate is hiked now it definitely comes down within a year’s time. Impact of per lakh EMI is hardly makes a difference. Since the interest rates on loans are increasing constantly, prospective buyers have become immune to such developments. Customers have started planning to buy flats that would suit their pocket and preferred location of their choice,” she says.
In the past two quarters, property prices in some localities and specific projects of Mumbai have seen a drop of about 5-10%. However, prices are still in not in affordable zone given the rising interest rates that is making buyers delay their decision making.
