The MMRDA auction was a damp squib as far as commercial property was concerned.

Gulam Zia, Head of Advisory Serices, Knight Frank told CNBC-TV18 that the stock markets were not doing too well and the direct impact was felt on real-estate. He added that the performance of MMRDA on the commercial front was an eye-opener.

According to Zia, the fall in real-estate prices will not be beyond a range of 5-10% in the prices compared to a month back.  In the next six-months, they are looking at a correction to the tune of 10-15% or thereabouts.

Excerpts from CNBC-TV18’s exclusive interview with Gulam Zia:

Q: Commercial properties did not receive too much interest, but residential properties did reasonably well. What will be the impact on both these sectors in the next six-months in Mumbai?

A: It’s a question of sentiment. The stock markets are not really doing too well for the last couple of weeks or so. The direct impact will be felt on real estate as well.

This impact is more in terms of sentimental value for investors, while a direct impact is very difficult to establish or a correlation is difficult to be said so soon. But nonetheless, the markets are feeling the heat already. Volumes have come down.  I am talking about the deals taking place. The buyers are willing to wait for a better deal coming their way.

The same is the case with both residential as well as commercial properties. The so-called ‘damp squib’ performance of MMRDA on the commercial front is an eye-opener. But nonetheless, the demands on office pays are pretty high. In spite of a good amount of supplies coming in, demand is definitely more than the supplies. It’s not directly going to impact prices of both residential and commercial properties so soon.

Q: How much of a fall do you see in the prices for both these properties?

A: The fall will not be beyond a range of 5-10% in the prices that they were say a month back.  If you are talking about an outlook going ahead six-months, we are definitely looking at a correction to the tune of 10-15% or thereabouts.

Q: In which categories would that be, across the board residential as well as commercial?

A: It will be felt in both the categories. In the next six-months horizon, we are going to see a correction of around 15%.

Q: Are there any specific areas?

A: South Mumbai will be slightly late to react that way. The supplies added on the residential sector in South Mumbai are pretty low compared to other supplies added in the rest of Mumbai. So, that way - while the rest of Mumbai because of demand-supply scenario will be impacted before South Mumbai. But South Mumbai will also follow the suit in some time to come.