Mumbai property sales registration down 27% in June at 2-year low

MUMBAI: Property sales volume in the country's hottest property market Mumbai declined for the 11th month in a row as rising interest rates and no major price corrections are forcing buyers to keep their home buy plans on hold.

In June, property registration offices in Mumbai witnessed 27% year-on-year decline in sales to 4,683. On a monthly basis, sales volume is down about 11% and close to two-year low.

However, leasing activity continued to show robust growth at 10,191 deals, up 11% from a year ago and 2% from previous month, according to data from office of Director General of Registration.

"Residential market transaction volumes (in Mumbai) have plummeted more than 70% since its 2007 heydays. Unsold inventory levels are currently estimated to be approximately 21% of the under construction stock," said property consultancy firm Knight Frank India in a report.

Sales registration is likely to remain low for next couple of months as this is a usual slack period for property market and it will be interesting to get an update around festive season of Dusshera and Diwali, a realty broker said.

New launches around festive season are likely to get a positive response from customers only after developers slash prices, he added. In the past four months, realty prices in some localities of Mumbai fallen about 5-10%. However, prices are still 20% above the 2007 peaks.

The investors' segment which makes up approximately 20% of the market demand has been observed to be actively reducing its real estate portfolio thereby adding significant shadow supply into the market, the Knight Frank report said.