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Mumbai's real estate market drying up
The real estate market in Mumbai is drying up. June has seen registration of 4,272 agreements compared to 6,103 in the same month last year, a fall of 30 per cent.
The state stamps and registration department said it was the sharpest fall in six months.
Also, the number of agreements registered during January-June 2011 is also lowest at 29,684, about 20 per cent down from 37,174 during the corresponding period in 2010.
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Mumbai's real estate market drying up
While a break-up of commercial and residential properties is not available, documents registered with the registrar is the clear indication of how people are staying away from buying properties.
However, the January-June data also revealed that people are opting for a leave and licence arrangement. During January-June, 52,463 leave and licence documents were registered, just over six per cent more than 49,357 during the same period last year.
In June, the rise was 7.67 per cent in this segment with the registration of 9,866 documents compared to 9,163 in the same month a year ago.
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Mumbai's real estate market drying up
"The slow pace of revival of the Mumbai realty sector, uncertainty over the timely completion of projects due to problems in the availability of sand and other raw materials and volatility in the market are turned out to be leading reasons for fall in the registration of agreements," said an official at the stamps and registration department, on the condition of anonymity.
State Housing Minister Sachin Ahir told Business Standard: "The buyers seem to have adopted a wait-and-watch policy, as they are expecting more availability of housing stock and rationalisation of prices in Mumbai's realty sector."
The registration data also reflect that more and more people in Mumbai are opting for lease deals than buying outright.
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Mumbai's real estate market drying up
The next few months will not see much activities either, as monsoon is a lean season for the real estate sector.
Pranay Vakil, chairman, Knight Frank India, said, "The slump in demand in real estate is getting prolonged and in such a case it is very likely that developers will opt for cost-cutting and even lower construction activities. One may also see lower land buying and aggression in selling properties. But slowdown also provides them with opportunities to implement out-of-the-box strategies."
Rajesh Mehta, chairman, Raha Realtors, said," Hardly commercial deals are happening nowadays as buy or sell deal. Most of the agreements registered are that of residential properties."
