Mumbai Real Estate – Undergoing a Rough Patch

                                                                                         

With increasing inflation, rising cost of capital, widening trade deficit and drop in the stock market, the Mumbai real estate industry is currently witnessing a downfall.

Due to dull real estate sales for the past few months the property prices in Mumbai is likely to fall by 10-15 per cent over the next six to nine months, say media reports.

Renowned real estate developers have credited the impending fall to rise in interest rates, rise of cost, credit pinch by banks and bearish capital market leading to poor performance of the Mumbai real estate industry.

All this is bound to have a negative impact on Mumbai properties. Though, on the other side it is a mark of maturity in the property market of the city. Further, the fall in realty price will help in reviving the consumer demand, feel Mumbai real estate agents.

Industry sources are of a view that this slowdown is leading to a cash crunch among Mumbai real estate developers. They are now competing against each other to complete their ongoing projects first. Besides inflation, rising loan rates and out of reach property prices have resulted in decrease in property values in Mumbai for the past three-four months.

But despite all odds Mumbai commercial real estate continues to rule the Indian commercial scene. There is a shortage of commercial space in the city whereas the housing segment is growing. The growing residential market is leading to an oversupply of residential property in the city. Since, considering the current situation people are waiting before they invest in Mumbai property the transactions are even more sluggish.

Moreover, as Mumbai’s redevelopment initiatives faces hurdles, since a survey by urban development authorities has found that the land government acquired for budget homes has encroached, the real estate sector of Mumbai has tough times to overcome.

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