The silver lining for the Mumbai real estate residential market may have arrived after almost a year long wait. Led by strong demand and stable pricing, housing sales have finally begun to show an upward trend again. Not surprising then that market analysts are expecting a better earnings picture come 2013, reports CNBC-TV18's Priyanka Ghosh and Archana Shukla.
It hasn't been easy buying a house in Mumbai for the last 12 to 15 months. Home buyers have walked a tight rope balancing high interest rates, inflation and stagnant new project launches for the most part of 2012. But now it seems they are ready to take the plunge.
So what's prompting this turnaround in sentiments?
Khushru Jijina, Managing Partner, Indiareit Fund Advisors says, "If you study it you will see that people were waiting and watching when the prices will come down. I would not say that the prices have fallen drastically but they have stabilised and there are good deals on the table today for both investors and consumers. Also now all the guideline changes effected by Subodh Kumar have into play so the market has stabilised."
Taking advantage of this buoyancy and free wheeling permits, Mumbai is expected to witness an influx of new project launches in the next three months.
After a gap of more than one year, DB Realty launched 380 apartments in its Prabhadevi project in late October.
According to company sources it is expected to rake in over a Rs 100 crore bookings from the project by the end of December. Riding the wave of mid-range pricing, L&T and Omkar developers launched their Lower Parel project at Rs 15000 per square foot, booking over 450 apartments in a matter of days.
According to sources, Lodha Developers is also planning to launch part of its NTC Mill project at rates of less than Rs 4 crore. At its end HDIL has said it will post an increase in both collections and enquiries in the coming quarter
The demand is of course strongest in mid ranged products, especially in those projects that are being launched in first phases. Developers specifically want to rake in big volume of sales in the early stages of a project launch as it generates cash flow for construction, especially when input costs have increased significantly. Consumers of course will need to catch these first launches to get the maximum benefit out of developers' vulnerabilities.