Will Real Estate Prices Go Down in Mumbai?
One needs to look at various aspects before answering the perpetual question “will real estate prices go down in Mumbai?”. Mumbai is one of the most vibrant market in India and has given home buyers the most attractive returns over the past few decades. The real estate market in any economy are primarily dependent on Demand and Supply. If the demand remains buoyant due to strong and flourishing economies then the real estate prices continue to be on the stronger side. So to begin with the market to stay strong, we need the overall political and economic scenario to be stable and in a growth phase. Post the year, 2016, the overall economy is going through a slew of changes, beginning with State Subjects like RERA has being enacted and by Mid 2017 we will have the GST, which bring in a lot of clarity and transparency in the real estate sector in Mumbai. These policies help the market to stabilize and give more impetus to the overall markets. So to understand, if the real estate prices will do down in Mumbai we need to be very vary of the overall conditions as mentioned above.
Understand Supply and demand
Another way to reviewing, the Mumbai property market and do an evaluation is to understand Supply and demand in each micro market. Over the past 10 years, the city business has shifted North and the majority of the city’s population resides in the suburbs and does increasing the pressure of Demand in the suburbs. There are properties available in different stages, pre-launch, launch, half way under construction, getting ready for possession in a few months or even ready possession. There is a definite movement across all these stages as the demand for homes in Mumbai is always ongoing.
The pricing pressure comes in when there is a lot of ready possession inventory in any micro market and that is one of the prime most reason of real estate prices to go down in Mumbai. Looking across majority of Mumbai’s location one does not see a huge supply coming in barring a few in Lower Parel, Thane and a few pockets where large complexes are being made. But due to the fact that the bookings in these projects start a few years, the sales happen over a period of time and the inventory stands absorbed.