Prices of luxury homes in Mumbai fell by 18% last year

Prices of luxury houses in Mumbai fell by 18% in 2011, the most among 23 world cities, according to a Knight Frank Prime Global Cities Index released on Monday. Although the global index rose by 3%, Asia fell by 1%. While prices in Mumbai fell the most (-18%) , Nairobi (up 25%) was the strongest performer during 2011, said the report. "Post the Lehman collapse, European and North American cities were largely responsible for the index's slump. Since late 2010, it has been the Asian cities which have dampened price inflation. In Q2 2010, prices in Asia Pacific were rising at an average rate of 23.6% each year, the comparable figure now stands at -1%," it said. The slowdown in the luxury Asian markets has highlighted the extent to which the "old-world" cities of London , New York and Moscow are outperforming the overall index. "London and Moscow have ranked highly for several quarters but Manhattan's recovery is gathering momentum. Foreign demand for New York's luxury homes is not only strengthening, but is also starting to diversify with Chinese nationals increasingly evident, particularly in the $1-$3m sector," said the report. It added that the flight of capital towards the world's luxury neighbourhoods increased in 2011. "Geo-political events in the Middle East and North Africa took hold and the tumultuous global economy weakened the viability of a number of alternative asset classes," it said. The report said price growth in 2012 will continue to be underpinned by this flight of capital from troubled world regions. This, combined with a desire amongst wealthy investors to target property and other real assets over financial products, will "reaffirm prime property's safe-haven qualities in 2012". 4 million sq ft more for city malls. Over 15 million sq ft of organized retail space was added across the country last year. Of this, over 90% came from Mumbai, Pune, Bangalore and Chennai. According to CBRE, global realty consultants, the financial capital saw a high amount of activity in its retail market in the second half of 2011. Around 4 million sq ft of mall supply, mainly concentrated in the central and eastern suburbs, entered the Mumbai market in the second half of the year. Among notable retail transactions in the city were the first stand-alone hypermarket by Reliance Retail (approximately 80,000 sq ft on S V Road, Santa Cruz ) and Metro Cash & Carry (India) 's second outlet, spread over 60,000 sq ft, in Borivli (E) . Source: http://economictimes.indiatimes.com/markets/real-estate/news-/prices-of-luxury-homes-in-mumbai-fell-by-18-last-year/articleshow/11697118.cms