Many buyers are not able to purchase homes after the prices zoomed by around 30%, since the condition of real estate sector started improving from August 2009. Said a buyer, “In the last few months, we have seen several short bursts of price rise, so much so, that in spite of increasing our budget by Rs 10 lakh we have been unable to buy a decent living space within the city”.
The constant increase in prices of homes seems to be putting off buyers in big cities too. Some areas in Mumbai, NCR and Bangalore have seen a decline in sales as against the highest sales posted n December 2009. With the anticipated increase in bank loan rates, real-estate experts say that a price correction of 15% can bring life back into the markets.
Pranab Datta, VC & MD, Knight Frank India said, “The rising prices of residential space are affecting sales of homes. Mumbai saw a dip in the volume of sales during the last couple of months. The city hit a peak of approximately 9,000 registrations in December 2009, but February 2010 saw only around 6,000 registrations. This clearly shows how buyers are turning more and more hesitant to purchase houses at inflated prices.”
He said, “In Mumbai, prices have already touched the peak witnessed in 2008. And since realtors have realised that the volumes of transactions have reduced, they will eventually offer inducements to attract home buyers. A price correction of around 15% could bring back buoyancy into the market, based on various indications.” He added that a situation may soon crop up when the real estate developers will be pressurized in reintroducing specific schemes and rebates that were eliminated.
He said, “Realtors are focusing primarily on premium projects, all priced at greater than Rs 40 lakh. This is proving to be too unaffordable for buyers , even with the economy stabilising and improved job security”.
Additional Reading: A guide to benefit from the refund banker scheme
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