Real estate in Mumbai shows positive signs, but it is too early to cheer

As real estate looks for a revival, some good news came from Mumbai. Direct discounts of around 10 per cent and lowered interest rates attracted consumers to Mumbai property market.

As per a report by JLL India, reduction in apartment sizes and falling interest rates pushed cumulative residential property sales in the last four quarters by 28 per cent compared with the corresponding period.

"This is a congruence of factors -interest rates are dropping, developers are willing to offer discounts and freebies such as subvention schemes, sizes of apartments dropping making it more affordable, buyers believing that markets have bottomed out and an overall marginal improvement in consumer confidence," said Ramesh Nair, COO, JLL India.

But this trend is not seen everywhere as domestic sentiment is not that cheerful.

Local property brokers in Mumbai also look less convinced as markets continued to be sluggish.

Meanwhile, JLL India report stated that developers in Mumbai managed to sell 16,990 units under new launches or in primary market in the last four quarters ending September 30 as against 13,290 apartments in the previous four quarters.

Also, experts are of the view that housing prices will not go up over the next two-three years as builders continue to focus on clearing their inventory.

JLL India stated that having realised that a price correction of sorts has already happened -given that the capital values have not gone up in the last two-three years despite an annual inflation of 5-8 per cent -fence sitters have started taking calls on purchases.

(Image: Reuters)