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Mumbai Real Estate Prices Started Falling

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Mumbai Real Estate Prices Started Falling

Last updated: April 4 2021
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  • REDUMMY
    started a topic Mumbai Real Estate Prices Started Falling

    Mumbai Real Estate Prices Started Falling

    It seems prices has started falling in Mumbai, many builders have started quoting less than what is being advertised, also many flats owners have reduced their prices to sell their flats as soon as possible before the price drops more, any first hand input welcome...

  • rmaharishi
    replied
    Any fall witnessed during the Pandemic ? Rental market is really stressed at this point as per few brokers I know.

    There were record number of deals in Mumbai though, does a person who is spending crores reslly care about few lakhs of stsmp duty.

    Leave a comment:


  • rsrsin
    replied
    Originally posted by nirmesh View Post
    I am not doing anything of the sort. I am just comparing rental yields over the last few years. Gross rental yields have become half; net rental yields have probably become one third.
    I understand and my point to share was that rental as yield to compare now with earlier itself does not seem like a indicator for measuring anything. Rental is high liquid locales are still strong atleast in Mumbai. Cities like Chennai are still not fully moved to the apartment concept so rental uptake is low and at lower amounts

    Leave a comment:


  • nirmesh
    replied
    Originally posted by rsrsin View Post
    Rentals in metros are not to be compared as yield against the market value of the asset. Rentals are used as income to keep pace with inflation and that is what it is. At max rentals also act as compensation for maintenance, minor repairs, small expenses etc., to keep the cost of acquisition under control.
    I am not doing anything of the sort. I am just comparing rental yields over the last few years. Gross rental yields have become half; net rental yields have probably become one third.

    Leave a comment:


  • rsrsin
    replied
    Rentals in metros are not to be compared as yield against the market value of the asset. Rentals are used as income to keep pace with inflation and that is what it is. At max rentals also act as compensation for maintenance, minor repairs, small expenses etc., to keep the cost of acquisition under control.

    Leave a comment:


  • nirmesh
    replied
    Originally posted by soarer View Post
    For all the debate that is going on for the past 5 years here's some common sense logic for why the property prices in Mumbai were ALWAYS HIGH. What we are witnessing today is nothing unique or different from what has been the norm in the past. It was never easy to buy a property in Mumbai anytime in the past and there is no reason why it will be easy to buy property in Mumbai anytime in the future! Unless there are other cities that develop in India that offer better social support systems and commercial opportunities.
    Agree that Mumbai was always expensive - but both rentals and property prices were high. Once you look at the rental yields, common sense will desert you; rental yields have never been as low as currently.

    The other thing is that Mumbai has stopped growing. The population in the Island city has declined and even including the suburbs, it has slowed down considerably. Again common sense should dictate that prices should decline if population is decreasing; that it is not happening just shows how easy it is to fool common sense.

    Leave a comment:


  • soarer
    replied
    For all the debate that is going on for the past 5 years here's some common sense logic for why the property prices in Mumbai were ALWAYS HIGH. What we are witnessing today is nothing unique or different from what has been the norm in the past. It was never easy to buy a property in Mumbai anytime in the past and there is no reason why it will be easy to buy property in Mumbai anytime in the future! Unless there are other cities that develop in India that offer better social support systems and commercial opportunities.

    Why Mumbai homes are so expensive | Business Standard News

    Leave a comment:


  • umangj
    replied
    I don't think prop market in Mumbai is gonna crash ever, there is a huge demand both from end users and Investor. Having said that I also don't see prices rise ....

    Leave a comment:


  • soarer
    replied
    Originally posted by anujrvg View Post
    Firstly prices falling doesn't mean , anyone will get 20-50% discount. 10-15% most likely.

    From 2010 to 2015, prices have been doubled - Agreed. But from 2014 till date , prices have remained flat. Admit the fact.

    So, any person estimating that prices will fall by 20+ % , is just fooling himself. But yes prices will fall to some extent (when u sit with a cheque) and u will
    not see two fold rise in next 5 years, That is guaranteed.

    So , the crux is - For end users this is a good market, Go with your cheque in hand and negotiate hard. May be you even
    have to visit the same builder couple of times. But he will submit to your demand in this bad market. Only caution don't go for
    under construction property AND do not expect out of the blue discount.
    Wow we have guarantees being issued, that too for something that has a time horizon of 5 years. Guess some members have a time machine!

    With regards to the claim that prices have stagnated in 2014 - 2015 period being the basis for correction let me remind you that this thread was started in 2010 in the backdrop of a correction in 2008 - 2009 period with exact same analogies and guarantees thrown in here and there. Look where we landed 5 years hence.

    I have been reading these doomsday posts on this forum since I joined this forum in 2008. All I can say in hindsight is that everyone who based their RE investment decisions based on majority view of IREF lost a serious opportunity.

    Best way to understand the market is to go out there wih a cheque book and talk to sellers to see of there is any correction. Based on real world experience I can "guarantee" that there is absolutely no discount available for clean projects.

    As stated earlier if there is a illegal building (no OC) in secondary market or undesirable building (SRA, leasehold land, local developer strapped for cash) in primary market there will be a discount - but that is only due to the nature of those buildings and nothing to do with overall so called crash / correction in Mumbai.
    Last edited October 24 2015, 09:10 AM.

    Leave a comment:


  • nirmesh
    replied
    Originally posted by anujrvg View Post
    Firstly prices falling doesn't mean , anyone will get 20-50% discount. 10-15% most likely.

    From 2010 to 2015, prices have been doubled - Agreed. But from 2014 till date , prices have remained flat. Admit the fact.

    So, any person estimating that prices will fall by 20+ % , is just fooling himself. But yes prices will fall to some extent (when u sit with a cheque) and u will
    not see two fold rise in next 5 years, That is guaranteed.

    So , the crux is - For end users this is a good market, Go with your cheque in hand and negotiate hard. May be you even
    have to visit the same builder couple of times. But he will submit to your demand in this bad market. Only caution don't go for
    under construction property AND do not expect out of the blue discount.
    The problem with well functioning markets is that there should be no slowdown. So if other equally risky investments are giving 10% returns, property MUST give the same returns. If two years later property prices are expected to remain at same level as current, the prices should correct by 20% today. That this is not happening basically points to a list of results why property markets are not well functioning.

    Personally, I am pretty sure that property prices are unlikely to increase over the next 2-3 years. Logically then, whether it is end user or investor, it does not make sense to buy property today unless you are getting 15%+ discount. It would be better to stay on on rent for that time or put your money in FDs.

    We should have further direction in 6 odd months or so. If rentals begin falling (not very likely) than the bubble is inflating and soft landing will be difficult. If economy picks up and rentals begin rising then I would expect that time correction over 4-5 years is possible. Meanwhile people can try bottom fishing.

    Leave a comment:

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