To stay tuned with real estate updates
@

Property prices in Mumbai drops by 7.2%

Property prices in Mumbai drops by 7.2%

Mumbai Real Estate Sector, a strong seller’s market has started showing some signs of turning in favor of buyers. The latest Makaan.com Property Index (MPI) for the month June 2012, which was released today, indicates an initial softening in property rates in major real estate market in India including Mumbai. Home buyers had adopted a wait and watch approach for a longer duration owing to high property rates & an even higher home loan interest rates. This reduced the volume of property transactions considerably leading to an increase in unsold inventory in the market. The real estate Mumbai property index for June 2012 stood at 1459 compared with 1572 in the month of June 2011. The Mumbai property index indicates a drop of 3.8%. The MPI figure was at 1459 in June 2012 compared to 1516 in March this year, indicating stability over the quarter.

As per the June 2012 MPI, the national index dropped from 1486 in June 2011 to 1446 in June 2012, signifing a softening of 3% in national residential property prices. The reduction is louder, if one looks at the city wise analysis. Cities with maximum price reduction over last 12 months are Hyderabad (-26%), Chandigarh (-20%) and Ahmedabad (-11%). Problems in Hyderabad are political and sentiment driven which creates volatility in the property prices. Chandigarh and Ahmedabad experienced new project launches at a significantly higher value compared to the prevailing market prices (during the June-October 2011 period) last year which took the property prices higher. These new launches caused a temporary mismatch in the demand-supply equation in these two markets. The situation has become better in the more recent past. Other real estate markets are also showing some sign of fatigue. The softening of prices is evident in markets of Chennai (-7%), Mumbai (-7%) and Bangalore (-5%). The coming 4-5 months (in the run up to the festive season) will be extremely crucial for the real estate industry. Giving support to the Makaan index were the property price movements in cities of Kolkata, Pune and Delhi NCR that rose by 25%, 16% and 4% respectively over last one year.


Keeping in mind the extremely buoyant underlining property market Makaan.com Property Index (MPI) has added four more cities to its coverage. These cities are Thane, Navi Mumbai, Gurgaon and Noida. Home buyers will be able to benefit from the unbiased and periodic updates on residential property price movements in these cities effective June 2012. If one analyses the graph (given below) these cities seem to be unaffected by the softening of prices seen else where. In fact Noida exhibited a phenomenal rise of 40% in the MPI figures on a year on year basis. The Index for Noida stood at 833 in June 2011 and has appreciated to 1174 in June 2012. There are two main reasons for this significant rise in Noida real estate prices. Firstly, the city was supply constrained for better part of last year due to ongoing conflict in Noida Extension and Greater Noida area. Secondly, the announcement made by the new government seems to have boosted the sentiments among home buyers in the main Noida area.

The property price appreciation in Gurgaon, another suburb of NCR region, was 9.7% over the past year. The MPI for Gurgaon was 1550 in June 2012 compared with 1413 in same month last year. The appreciation in Gurgaon was slightly muted owing to the recent launches which took place 15-20 kms away from the main city hub and at substantially lower prices. The main Gurgaon area continues to appreciate at a significantly higher rate. The price index for Thane and Navi Mumbai showed an appreciation of 10.3% and 10.9% respectively. The MPI figures for the cities were 1800 and 1438 in June 2012 compared to 1631 and 1297 respectively in June 2011.

If one looks at the short term (quarterly) analysis, the Makaan.com Property Index (MPI) of main cities exhibits a mixed trend. On comparing the property prices of June with March 2012, we observe that the national index has remained stable with a small drop of 1%. Cities that have exhibited a positive trend include Hyderabad (10%), Chandigarh (+9%), Ahmedabad (+9%), Pune (+6%) and Bangalore (+4%). On the other hand, the cities that have indicated decline in property prices are Chennai, Kolkata and Mumbai with a drop of 9%, 6% and 4%. The Delhi market remains stable during the quarter.

Commenting on the findings Aditya Verma, EVP & COO, Makaan.com says, “Indian real estate market is facing multiple head winds that would keep the property prices under check at least in the medium term. A short term correction is actually healthy for the market and would attract fence sitters thereby boosting sentiments. We expect the prices to remain range bound over the medium term (9-12 months).”

Makaan.com Property Index (MPI) is part of the knowledge division of Makaan.com christened MakaanIQ that has been bringing out property research & analysis reports for the benefit of homebuyers and real estate industry. MakaanIQ was the first to predict a shift towards affordable housing in first half of 2008. The Index is another attempt at bringing objective information and analysis for the benefit of the Industry and the country. This index is based on minimum database size of 20,000 data points every month and the analysis has been drawn over a period starting Jan’09. The complex algorithm takes into account the property prices as base and then factors in the demand and supply of residential properties for each of the cities covered by it. Care has been taken to give weight age to cities in line with the size of underlying property market. The prices of properties in Mumbai were obtained across micro-markets through property listings on the website as well as Makaan.com’s nationwide sales force.


Tags: Buyers, makaaniq


7 Building Approvals That You Can’t Overlook

Getting the required approvals for a property is important to have a peaceful stay at your new address. MakaanIQ takes a tour of some of the approvals/sanctions a builder has to take before selling the property.

Thu May 26 2016

+ Click Here To Read This Article

5 Reasons You Should Hire An Expert Advisor When Buying Your Dream Home

PropGuide tells you why having a real estate expert by your side could benefit you and smoothen the home-buying process.

Wed May 18 2016

+ Click Here To Read This Article

5 Things That Define A Luxury Home

MakaanIQ lists five things that define a property as luxury.

Fri May 13 2016

+ Click Here To Read This Article

5 Common Home-Buying Mistakes

Ready to begin your home-buying process? Here are some common mistakes you must avoid.

Fri May 13 2016

+ Click Here To Read This Article

Key Connectivity Features To Look For When Buying Your Dream Home

MakaanIQ helps you create a connectivity checklist before finalising on a residential property for buying or investing.

Tue Apr 26 2016

+ Click Here To Read This Article

6 Things You Must Do Before Renting Your Property

MakaanIQ lists few things that you should keep in mind before renting your property.

Mon Apr 25 2016

+ Click Here To Read This Article

A Classic Example: Indian Homes With European Theme

With architecture becoming an important criteria of choosing a property, theme-based residences have emerged as a successful strategy in the Indian real estate domain. MakaanIQ takes a look at some of the remarkable Indian projects which exude the magic of the bygone era.

Mon Apr 25 2016

+ Click Here To Read This Article

5 Home-Buying Tips for New Parents

Purchasing a home is a challenging task but it becomes more taxing if you are a new parent. MakaanIQ lists a few home-buying tips for new-age parents.

Fri Apr 22 2016

+ Click Here To Read This Article

MakaanIQ shares more about these bio walls and how these can be used in your home.

MakaanIQ gives you an all-round perspective of both the cities to help you take the final call.

MakaanIQ lists some amazing ways to style the foot of the bed.

MakaanIQ lists seven such modern day architects that have been wowing the world with iconic...

MakaanIQ on how Power of Attorney helps NRIs manage their assets in the country of their origin.

A look at the benefits women home buyers get in India.

MakaanIQ lists four reasons why laminate flooring is a perfect option if you are planning to give...

MakaanIQ gives you some tips on settling in your new address and breaking the ice with your...

If you fall on hard times and need money, second mortgage can be your saviour. MakaanIQ explains...

Pegged as the world’s biggest infrastructure project with an estimated cost of $90 billion, the...

Subscribe Now

To stay tuned with real estate updates.

Pick:

x +

Drop Your Query here


Top