Flats sold at 23% lower rate than average price of unsold stock.
Housing property prices in Mumbai have started rising again. Contrary to market expectations,property prices in the quarter ended March 2013 went up by three per cent over the previous quarter. This is a reversal to the trend in the quarter ended December 2012,when prices marginally dipped by one per cent over its previous quarter.
According to research firm Liases Foras,the trend indicates that the correction in real estate prices could not be sustained.
Despite the marginal dip in prices during October-December 2012,only about seven per cent of the total inventory was sold. This led to a major inventory pile-up that will take at least 40 months to clear at the current pace of absorption,says a report by Liases Foras. At present,the citys property market has an unsold stock of over 133.39 million sq ft. According to experts,a healthy market does not maintain more than eight months of inventory ideally.
Data by Liases Foras also points out that the weighted average price of the unsold inventory in Mumbai Metropolitan Region (MMR) between January-March comes to Rs 11,626 per sq ft. As against this,the average price of the homes sold in the same period was Rs 8,972 a sq ft (23 per cent lower). This indicates that the houses which were sold in the previous three months were cheaper, said Pankaj Kapoor,founder & managing director of Liases Foras. Property valued at the higher end remains unsold,he added.
While the current rate of property stands at Rs 11,626 per sq ft (for the quarter ending March 2013),it was much lower at Rs 11,295 per sq ft in the previous quarter.
Though sales during the quarter happened across segments with buyers mainly looking at affordable homes,the report states that the maximum number of homes in the unsold stock are in the range of Rs 1crore to Rs 2 crore.
According to a recent research report by Knight Frank,in 2012,Mumbai witnessed a 0.5 per cent increase with average property price increasing from Rs 57,500 per sq ft to Rs 57,800 per sq ft during the year. This takes into account markets like Napean Sea Road,Colaba and Cuffe Parade,it said.
It also points out that an attitudes survey of private bankers and wealth advisors shows that amid economic insecurity,residential property managed to retain its global appeal and HNWIs (high-net-worth individuals) have been steadily increasing their exposure to real estate.