Mumbai residential property sales down

Liases Foras' December quarter figures show at the current rate of sales, Mumbai builders will need 44 months to clear their inventories While other cities are seeing increased sales of residential units, buyers in Mumbai are scarce. The latest data released by Liases Foras on the December 2011 quarter shows that Mumbai has seen a 30% year-on-year decline in sales, while NCR, Pune, Chennai, Bengaluru and Hyderabad have all recorded growth. Yet, Mumbai, along with NCR, has seen a price rise of 25% year-on-year, the highest in India. Among six cities Mumbai has fared the worst with a “sales velocity” of 1.26%. Sales velocity refers to the rate of property offtake. At the present rate, the city will need 44 months to clear unsold inventory of 112million square feet of area. Mumbai is also the costliest, with the average price of a flat now being Rs1.09 crore, where the price per square feet of area is Rs10,559 on an average. Compare that to the prices in other cities: in NCR, total cost is Rs52 lakh at Rs3,395/sq ft, Rs45 lakh for Pune at Rs3,860/sq ft, Rs68 lakh at Rs3,859/sq ft, Rs56 lakh for Hyderabad at Rs3144/sq ft and Rs47.29 lakh for Chennai at Rs3,826/sq ft. Even during the September 2011 quarter, Mumbai's flats cost Rs10,021/sq ft, while other cities were lagging far behind. Pankaj Kapoor, MD, Liases Foras, said, “The Mumbai market is in a confused state. Builders' plans about FSI, etc, have gone for a toss after the new DCR came in. They have to get new plans. We are seeing many projects in the central and western suburbs are getting stalled. The prices have peaked, inventory pile up is huge. It is the most inefficient market.” While Delhi-NCR has 232 million square feet of unsold space, it will require 31 months to clear the inventory. NCR has a sales velocity of 1.62%. Mumbai sold only 8 million square feet of area in the December quarter, which was worth Rs5,337 crore. In terms of sales velocity, Pune is the most efficient market, with 3.13%, while Chennai comes next with a velocity of 3.02%. However, Bengaluru has shown an astonishing 106% increase in year-on-year sales, which may have come on the back of new infrastructure projects. “Bangalore must be approached with caution, because while sales are increasing, so is the inventory. Also, we are seeing launch of luxury projects, which may indicate a potential speculative market,” said Mr Kapoor. Political happenings seems to have taken a toll on Hyderabad's sales, which saw a 21% decline quarter-on-quarter, but Mr Kapoor says that it is an efficient market where existing inventory is getting depleted while new launches are not taking place. source: http://www.moneylife.in/article/mumbai-residential-property-sales-down/24243.html