Mumbai property lease deals continue to rise to new peak, sales remain weak

MUMBAI: Property lease transactions in Mumbai continued to rise to new peaks with June data showing 12% year-on-year jump at 11,401 deals, highest since February 2010. Property registrations, however, rose mere 3% from a year ago during the month to 4,869, showed a report from brokerage Prabhudas Lilladher.

The trend continues to indicate that home buyers, who are waiting for a correction in property prices, prefer to lease apartments than buying on outright basis as of now.

With interest rates remaining firm the woes of the industry are likely to continue. With developers sitting on highly leveraged balance sheets, a price cut becomes a strong possibility, the brokerage said in a report.

"We believe the challenges to the sale scenario in the city continue to remain high and more needs to happen to correct the stressed affordability equation amid high property prices," the report said.

The brokerage has maintained its cautious stance on the city’s realty scenario. It also added the scenario for commercial real estate in the city remains terribly weak, with vacancies levels at around 20%.