Festive Realty
Ganesh Chaturthi 2018: Will it bring about a revival in Mumbai’s property market?
5:14 PM
Ganesh Chaturthi 2018: Will it bring about a revival in Mumbai’s property market?
Amidst rising prices of essential commodities, increasing home loan rates and a falling rupee, we look at whether the festive season starting with Ganesh Chaturthi, holds any positives for the real estate market in Mumbai
Ganesh Chaturthi marks the start of the festive period. It is a time, when developers strive to clear their old stock, increase sales and capitalise on the positive sentiment. For home buyers, the festive season translates into good deals and offers on property transactions. Hence, this period brings a win-win situation for all stakeholders in the real estate sector. However, this year, Ganesh Chaturthi will be celebrated in a scenario, where the Indian rupee is depreciating against the US dollar and home loan interest rates are inching upward.
Anuj Puri, chairman of ANAROCK Property Consultants, says that “As per ANAROCK data, out of the total new supply (of approximately 1,14,400 units) from January to August 2018 across the top seven cities, the Mumbai Metropolitan Region (MMR) saw the maximum new launches, with nearly 35,800 new units. On the sales front too, the region clocked maximum housing sales with approximately 15,200 units being sold in Q2 2018, an increase of 26 per cent against the previous quarter.” Despite the gloom over rising prices, experts, hence, expect to see an uptick of 10-15 per cent in residential sales velocity during the festive season, due to various promotional schemes offering direct/indirect reductions in the prices of apartments.
Ravi Ahuja, senior executive director, Mumbai and developer services, at Colliers International India, points out that developers are rolling out discount schemes and freebies, to lure home buyers, to address the issue of inventory build-up. “Developers usually launch discount schemes, in the form of various interest subvention schemes, offering flexible payment plans to buyers with 10 per cent or 20 per cent down payment and the rest on possession. Developers also offer freebies, especially in the case of ready-to-move-in apartments, in an attempt to lure buyers to reduce their inventory overhang,” he explains.
Other challenges for Mumbai’s real estate market:Despite the positive environment, the proposal by the state government to levy a surcharge of one per cent on stamp duty (resulting in an increase to six per cent from the existing five per cent), could prove to be a dampener in the short-term, as property prices will rise further. A major impact of this increase, is likely to be felt in the affordable housing segment.
- Inventory build-up and high cost of borrowing.
- Meeting regulatory requirements, with respect to RERA.
- Procuring multiple approvals from government authorities.
- High GST rate and rising input costs.
- Increase in home loan interest rates
Niranjan Hiranandani, CMD of Hiranandani Communities and national president of NAREDCO, maintains that property prices have remained static in most micro-markets across the MMR. “Moreover, there is a possibility of further sweetening of the deal from the developers’ side, at the purchase stage. Given these two factors, I would say that in most micro-markets, property prices across Mumbai are attractive for home buyers,” he concludes.Home buyers looking at the affordable and mid-segment housing, should focus on Thane, Navi Mumbai, as these locations, with their excellent infrastructure and cosmopolitan nature, have emerged as sought-after peripheral destinations. “Premium locations like Bandra west to Andheri west, will remain in-demand and given the 10-12 per cent price correction in older buildings, one can use this as an advantage, to buy for current or future end-use,” suggests Ahuja.
-by Amit Sethi
Source : Housing.Com
