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NOTIONAL PRICE vs SALABLE PRICE

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NOTIONAL PRICE vs SALABLE PRICE

Last updated: December 7 2012
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  • NOTIONAL PRICE vs SALABLE PRICE

    Nowhere in the world there is so much confusion as there is in India about 'PRICE ' of property.

    In every other country ( or at least in countries where there are established norms ), the NOTIONAL PRICE = SALABLE PRICE.

    In India NOTIONAL PRICE = Twice or Thrice the SALABLE price.

    Notional price is the ASSUMED price. This usually happens because of brokers, uninformed pricing and lack of regulation. Example : Very reputed builder launches luxury apartments in uptown, Mumbai with top notch amenities. The surrounding areas pick up the price ( and not amenities). They argue that prevailing price is this. But this is called notional price.

    At this price, neither rental not ownership transactions take place. So, except that the owner / builder keeps saying the price is 'x'. But no takers.

    Salable price is based in affordability ( earning versus expense and saving potential) and cost index of the area. In this scenario , the buying and selling happen gradually and price too catches up as the affordability increases.
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