Luxury apartments on the block in Mumbai’s upscale localities are seeing a steady stream of inquiries but few takers, as prospective buyers are seeking deep discounts that sellers are unwilling to offer.
According to property brokers, prices have not softened to buyers’ expectations, but deals are expected in the coming months in Lower Parel and Worli, which are among the most expensive in the country.
“Before the lockdown started, luxury builders expected 20-25% of their stock to sell immediately after launch; now, that expectation has come down to 10%. If a sale happens, it is a boon for a builder," Yashika Rohiira, a real estate broker said. “A few buyers who had already inspected the property and were on the fence earlier are now keen and coming forward to buy, however, anticipating discounts of up to 20-25%."
In the luxury segment, about 85% of available homes are resale properties while 15% are from developers, according to JLL India, since these locations have fewer new constructions due to high land prices.
JLL India’s research shows Mumbai has around 200 ultra high net-worth families that invest in niche luxury real estate in marquee properties in select areas and projects such as Altamount Road, Samudra Mahal, Walkeshwar and NCPA apartments.
“Transactions are not happening yet as expectations in some cases are unrealistic with buyers asking for 40% discount," said Ritesh Mehta, senior director and head (West India), residential services at property consultant JLL India. “Besides, sellers plan to hold on to their properties for some time till the market improves. We see the real impact of covid on real estate coming in terms of correction of prices in the luxury segment in August-September."
Luxury home sales sold till March were at 10-15% below the market price Mehta said. “Offers are unrealistic and, thus, it is taking time to close them. If the real estate market sees a correction, luxury segment will be the most active. If it does not, in the next few months, we will sail through," added Mehta.