Mumbai Residential Realty: Continuing slump hits hard

Mumbai’s residential market has been hit by a continuing slump in demand, with unsold inventory reaching an all-time high of 1,30,000 units in September, according to a Knight Frank report.

Unsold inventory in the Mumbai metropolitan region (MMR) was almost 44%, compared with 26% in the National Capital Region (NCR) and lower in Bangalore and Chennai.

Owing to the weak demand, the MMR residential market will require at least nine quarters to exhaust existing unsold inventory.

The weakness is visible at the top end of the market in Mumbai (see table).

Prices in the quarter have either dropped or remained flat compared with the year ago.

“This will put pressure on prices in the medium term and the scenario will last till the general elections of 2014,” said Mudassir Zaidi, national director, Knight Frank India.

“It’s overall a good time for buyers to expect good deals in the market.” Developers are open to negotiation, especially in the premium segment, reducing prices up to 25% for a sizeable upfront payment.