Mumbai Real Estate: the Demand-supply Game

By: George Gonigal

The low availability of affordable housing in Mumbai is resulting in rise in property prices and this is why properties that were available in the range between Rs 25 and 60 lakh are now touching Rs 70-Rs 1 crore, industry experts say.

As per various media reports the residential property prices in Mumbai could drop by 20 per cent but due to scarcity of housing units the property values are still high and people just cannot meet the expense of having a house in big cities like Mumbai.

A numbers of buyers are looking for apartment flats in Matunga and Sion, but there are just about 35 to 40 flats available in these places. The demand side is very robust but supply side is slacking, thereby pushing up real estate prices.

Industry sources inform that residential property transactions have gone down by 20 to 30 per cent in Mumbai, due to price rise. To tackle this situation and to heighten sales real estate developers are offering schemes like stamp duty rebate, free parking and interiors. Although they are not slashing prices significantly, as it signs the beginning of a downward trend. Instead they are holding on to the prices to keep up the thrust.

Real estate brokers state, that there isn't sufficient affordable housing options in the market but there's a lot of liquidity in the market, and hence prices are keeping high. Further they feel that gone are the days of sky-scraping growth. Nowadays developers are game for affordable properties, said Ramcharan Padhi, a Mumbai-based property broker.

Even though subjective statistics affirms marginal price fall in the industry, in some pockets, the fact remains that supply of apartments and developed land in the prime areas of Mumbai is scarce.

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