Pointing to the falling property prices, global property consultancy firm CBRE reports that the residential market is on the verge of a price-correction. The property consultancy firm added that the builders are pressured to cut down the prices by the weak home-sales.
Mr. Anshuman Magazine, CBRE’s chairman & MD for South Asia, pointing the fallen property prices in Mumbai and other major cities of India, said that the housing segment will soon experience a price-correction. He said that if the lower sentiment remains the same in the residential market, it can be sure that there is a bigger flow of black money.
Compared to the second – quarter prices, prices for the newly launched homes in the third quarter are down by 2 to 5% in Mumbai, reported CBRE. Substantiating their report, another property consultancy reported that the property prices in Mumbai have fallen. According to the report of Liases Foras, the prices in Mumbai have fallen by 1%.
Both the consultancy firms reported that the prices in other cities also are falling significantly. Despite the fall of property prices in these cities, the home –sales dropped. Cushman and Wakefield has reported that the home-sales have fallen by 16% in major cities.
With 32% fall in home-sales, Chennai topped the list. Home sales in Hyderabad fell by 25% while Mumbai and Delhi witnessed a fall of 14 and 10% respectively. This decreased number of home–sales pressured the builders to cut down the property prices.
With the fall of sales of housing units, the builders are more troubled. Some of the builders are already facing funding issues. National head of Confederation of Real Estate Developers Associations of India (CREDAI) Mr. Lalit Kumar Jain said that the builders are forced to cut off the prices.
New launches also are offered to the people at lower rates in Mumbai. CBRE reports that with the increased number of launches, other cities are facing the pressure to bring the prices down. Jones Lang LaSalle reported that price correction has taken place in many of the areas in Mumbai. Yet it remains stagnant in many of the areas, JLL added.