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The Maharashtra Chamber of Housing Industry (MCHI) has said that its four-day property expo held here recently attracted 74,516 visitors.
The exhibition, ‘Property 2011' showcased over 1,500 projects from developers across the Mumbai Metropolitan Region (MMR) and select cities.
Whether the footfalls will translate into sales remains to be seen with the high prices prevalent in the city. Many property consultants are in agreement that a price correction is in the offing.
Mr Sunil Mantri, president, MCHI, while addressing the media ahead of the expo, had said prices were a factor of demand-supply dynamics. The association members too were candid in stating that the price rise in properties was in line with the overall increase in prices seen across products and commodities.
END-USER EXIT
State Bank of India, which announced that it would discontinue its teaser home loan scheme from April 31, has said that “in the last few quarters the status of the residential real estate market has experienced upward pressure on prices across cities and micro markets. Consequently, the industry has witnessed exit of end-users and tapering off investment demand.”
As such the Mumbai market has seen periodic hikes in prices since the lows of 2009. A Kotak client report said the property prices in 2010 alone had gone up by over 40 per cent.
AFFORDABILITY
An Edelweiss report on the exhibition said it was clear that affordability of the buyer was a key issue with prices up by 10 per cent, on an average, over the last six months. The researchers, who visited the expo, said they expect properties prices to correct by about 15 per cent by October.
Moreover, properties showcased at the expo were priced at over Rs 75 lakh, which they said was beyond the realm of affordability of the majority of buyers.
Another key trend that emerged was developers demanding a premium of 15-20 per cent for ready-possession projects and projects expected to be completed in 12 months, Edelweiss said.
Of late, banks and housing finance companies are reported to be seeing a slackening in demand for home loans. Prospective buyers are postponing decisions on expectation that the high property prices will cool off. The gradually rising interest rates are also acting as a demand dampener, experts said.
Last week, credit information bureaus officials traced a clear trend and said they were receiving fewer home loan applications for verification from banks and housing finance companies in the last few months.
The dip in demand for home loans appear more pronounced in Mumbai and Delhi where property prices have touched unrealistic peaks.
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