In a direct fallout of Mumbais astronomical realty prices,property registrations in 2011-12 have slumped by 18.5 per cent compared to the number of homes bought in 2010-11.
Data collated by Newsline from the stamp duty and registrations office show that registration of new homes in Mumbai have reduced by almost a fifth compared to the previous financial year. Only 62,261 new homes were registered in 2011-12 as against 76,410 the previous year. The dip is significant in the light of the fact that 2010-11 was a very sluggish phase for offtake of new homes.
A steeper decrease in property sales is evident when numbers for January-March 2012 are compared to the corresponding months two years ago. The decline in homes sales between the first sequential quarter of 2012 and 2010 is as sharp as 28 per cent. Conversely,the number of rental agreements has gone up by 55 per cent in the same period. This goes to show that there exists a considerable demand for housing. But when prices have scaled beyond affordable levels,people are forced to put their buying decision on hold and live in rented homes instead, said Gulam Zia,national director,research and advisory services at property consultants Knight Frank.
According to a recent report by London-based realty research firm Savills,which looks at housing trends in 10 global cities, Mumbai rentals are most disproportionately low in comparison to the soaring capital values. This,says the report,is indicative of a speculative market where investors buy a property not for the rental yields but for the appreciation in its value. This theory of a heavily capital-driven property market is supported by figures released by the census directorate last month,which show that as many as 4.79 lakh houses are lying vacant in Mumbai.
The jacking up of rates in the investor-centric real estate market has resulted in the average per sq ft cost of a house in the Mumbai Metropolitan Region (MMR) increasing by 100 per cent over the past four years. An analysis by the real estate research firm Liases Foras shows that in March 2009,the average per sq ft price of an apartment in the Mumbai,Navi Mumbai,Thane and other areas of MMR was Rs 5,354. As in March 2012,it has jettisoned to Rs 10,600 per sq ft.