Indian Speculative property purchases in Mumbai are over

Fewer investors are buying off-plan apartments at discounted prices before selling them for a profit some months later.  That’s the conclusion of a new report from a leading property firm who believe that Mumbai is now seeing a buyer’s not a seller’s market.

Developers taking longer to sell property in India

The Times of India states that ‘apartment sales during the launch of a project itself are over because of the slowdown in the Mumbai residential market.’

And, property consultant Jones Lang LaSalle recently published its Mumbai Residential Real Estate Review (March 2011) which states that: “Short-term speculators booking apartments at pre-launch or launch prices and selling them a few months later at higher prices has reduced considerably.”

Over the last six months, developers have been consistently offering lower rates to buyers prepared to pay a 30-40 per cent deposit, says Ramesh Nair, Jones Lang LaSalle managing director (West India).

Mr Nair said: “The past six months have seen the return of negotiability in asking prices, and saw the return from a sellers’ to a buyers’ market.  Both registration data and home loan disbursals are indicating a distinct slowdown.  The number of apartments being sold in the first quarter of 2011 is considerably lower than in the corresponding period of 2010. Developers who were selling their entire projects in a few weeks are now taking months to sell their unsold stock.”

Investors expecting a further property price correction in Mumbai

The newspaper reports that ‘the Jones Lang Lasalle review said many home buyers are playing the waiting game, anticipating a further correction.’

The Jones Lang LaSalle report says: “”The key reasons behind this slowdown are higher prices, higher interest rates impacting affordability, lack of liquidity, scams diluting investor sentiment and, to a lesser extent, excess supply in a few micro markets.”