Mumbai's realty market called the financial capital of the country has been hit by Coronavirus. The economic slowdown caused by the Covid-19 epidemic has brought down property prices in most areas of the city. Sudha Kumari, a real estate broker living in Dadar area here, says that the developers are ready to sell the house at Rs 40,000 per square feet at the same time, whereas last year they were not willing to cut even a pie from Rs 50,000 per square foot. In this way, realty prices have fallen by 20 percent over 2019.
Sudha says that the developers are troubled by the debt burden incurred for the projects and seeing the sluggish demand, they have agreed to sell the houses at low prices. The problem is that even after dropping the price, buyers are not asking them. Real estate investor Sunil Solanki, also from Dadar, said that unless the prices come down by 30 percent, he will not even hit the developers. He said, "This is a good time to buy real estate property, but I don't think the price drop will stop." Now the price will be less.
Realty sales have stalled for the last three months due to the Covid-19 pandemic and lockdown. That is why properties in Mumbai's main residential markets are being sold at lower prices. According to Enarock Property Consultants, sales in the Mumbai metropolitan area declined by 61 percent in the first half of this year. This is a 51 percent decline over the previous half. In this area, 2,09,560 ready units are waiting for customers. Such unsold real estate is nowhere else in the country.
A local broker told Business Standard that realty prices in South Mumbai had reached Rs 1 lakh a square foot last year, but this year it has fallen by 20-25 percent. Realty may not have seen such a huge decline in the last ten years. Brokers say that developers in central Mumbai are debt-ridden and there is no other option but to reduce prices due to excessive housing in areas like Thane.
Real estate monitoring firm CRE Matrix currently has a debt of Rs 8.1 lakh crore on domestic real estate and loans worth Rs 1.2 lakh crore have been sanctioned in the last financial year itself. Of this loan, 42 percent has been taken in the Mumbai metropolitan area.
Experts point out that the condition of Navi Mumbai is better and there are less unsold properties and exemptions in the western suburbs as compared to the middle suburbs. HDFC Chairman Deepak Parekh said in April this year that developers should be prepared for a 20% reduction in house prices. He also advised the developers to get cash by selling the house at the choice of the customer. Union Minister Piyush Goyal had the same opinion. He had asked the developers to reduce the price and sell the house instead of waiting for the market to improve. He had said, 'Unless you reduce the price, your property will remain unsold. You sit with your hands on your knees and miss the debt or sell at the price you get. '
Brokers are seeing prices fall. Vineet Matlani, managing director of Mumbai and Thane's renowned broker Rudram Realtors, said, "The price in Thane has come down by 20-25%. All developers have slashed prices. If you give the entire amount immediately, you can get even more discounts. No one will make the customer unhappy just because of the price. ' He said that all the prominent developers including Lodha, Kalpataru, Piramal Realty are giving discounts.
Many brokers believe that realty has been getting fewer customers for the last five-six years due to increased prices. Due to this, developers are lowering the price to increase sales. Rajesh Mehta, the lead consultant in the western suburb of Mumbai, said, "The market is running at the behest of the customer at the moment. Developers are willing to do anything. Everything has come to a standstill Sales are not happening, deals are not happening and registries are also not happening The condition is getting worse. Nobody knows what is happening. ' However, large realtors with penetration across the country do not believe that the price will come down. Sanjay Dutt, managing director and chief executive officer of Tata Realty and Infrastructure, said, "The day real estate prices come down by 20 percent, understand that customers will not be able to buy them." It would mean that GDP is low, there is huge insecurity in employment and inflation and interest rates are low. '
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