Property, Metros, Rate hike, Delhi, Mumbai, Home loan
If you are planning to buy a house in key metros cities, including Mumbai and Delhi, good news is coming your way.
It is likely that prices will drop in the next few months in these cities, according to analysts and real estate consultants. In fact, analysts say that there are indications in the market already: price drop in Mumbai and moderation in residential rates in the Gurgaon region.
Says Sobhit Agarwal, managing director at consultancy firm, Protiviti Consulting Ltd, “Homebuyers are typically under inflationary pressure. Plus, banks have also increased their lending rates. Wherever there is speculative buying and selling, lending becomes tougher. This is the case with metro markets. This has affected the demand for housing. But since there is a constant supply of residential projects, rates tend to move up.”
In the new launches category, developers are offering higher discounts.
“As of now, prices have dropped in areas such as Parel, Lower Parel, Mahalaxmi, Bandra East, Andheri East, Goregaon East and Mulund and Kurla. It is fairly certain that this correction phase will continue for the next three months and inevitably extend into the traditionally slower monsoon/ vacation period,” says Sanjay Dutt, chief executive officer (business) at property consultant firm Jones Lang LaSalle India.”
Another indication of a likely price drop comes from the findings of a Mumbai-based consultancy firm Religare Capital Markets Ltd. The report says the inventory, or unsold residential units, has shown an uptrend in the past few months.
Tightening liquidity, rising interest rates and lower offtake in housing projects will also add to rise in the inventory. This may lead to a situation when developers will be under pressure to lower their rates. The report added that after a 20-30% increase in prices over the past 1-1.5 years, rise in prices has moderated in Mumbai and Gurgaon.
So if you are planning to buy in these markets, holding on to the buying decision for two to three months may get you better discounts.