Residential Property Demand Drops in Delhi and Mumbai

The demand for residential property in India has taken a significant hit due to the sharp rise in prices, resulting in a massive stock of unsold inventory in cities like Delhi and Mumbai. According to Pankaj Kapoor, managing director of Liases Foras, the high prices charged by developers are the primary reason for the drop in demand. Kapoor notes that new residential projects are priced between Rs 1.5-2 crore and above, making them unaffordable for most people living in the cities. Investors are also wary of investing in such projects due to uncertainty about future sales.

Key Takeaways:

• The drop in demand for residential property in Delhi and Mumbai is attributed to high prices charged by developers, with new projects priced between Rs 1.5-2 crore and above.
• The situation in Delhi- NCR is similar, with inventory doubling in the last quarter and sales driven by investors rather than consumers.
• In Mumbai, nearly 95% of flats are priced above Rs 50 lakh, and 50% are above Rs 1 crore, making them unaffordable for many.
• Of the 70 million square feet of residential inventory in Mumbai, only 3-4 lakh square feet are priced below the Rs 50-lakh price bracket.
• Experts predict a correction in property prices in the big cities within the next three to four months.
• The current prices are unrealistic and unsustainable, and actual buyers are expected to wait before purchasing a property.

Statistics:

• 15-20% drop in demand every quarter in Mumbai due to high prices (Source: Pankaj Kapoor, Liases Foras)
• 25-30% correction expected in property prices in cities like Mumbai (Source: Pankaj Kapoor, Liases Foras)
• 50-80% of flats sold in 30-40 days due to investor-driven sales
• 95% of flats in Mumbai priced above Rs 50 lakh (Source: Yashwant Dalal, Estate Agents Association of India)
• 50% of flats in Mumbai priced above Rs 1 crore (Source: Yashwant Dalal, Estate Agents Association of India)
• 70 million square feet of residential inventory in Mumbai (Source: Yashwant Dalal, Estate Agents Association of India)
• 3-4 lakh square feet of residential inventory priced below Rs 50 lakh in Mumbai (Source: Yashwant Dalal, Estate Agents Association of India)

Sources:

• Pankaj Kapoor, managing director, Liases Foras
• Yashwant Dalal, president, Estate Agents Association of India (EAAI)
• Estate Agents Association of India (EAAI) report
• Syndigate.info and Albawaba.com