Categorized | International

Mumbai Real Estate Market at 30-Month Low

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With higher interest rates and incredibly high home prices killing off demand, the city of Mumbai has hit a 30-month low in home sales. Sales dropped nearly three percent from the previous quarter, providing for the worst month for residential real estate sales since 2008. To make matters worse, the number of unsold property units has also hit a record high.

Real estate analysts and experts in India believe that these numbers are an indication of absurdly high prices, and that prices must be lowered in order to correct the system. It is also believed that the high interest rates are also causing sales to decline. However, India’s central bank is set to increase interest rates for the twelfth time since March to eight percent. It is believed that land prices may drop in the city, but there will still likely be a cash crunch with interest rates slated to increase.

Mumbai’s unsold inventory is now at forty months, which is four to five times higher than what is considered to be healthy. With home sales projected to continue falling, this number may rise even more. Despite the increase in the number of unsold housing units, the average price of homes rose yet again to 9,716 rupees per square foot. The prospects of the real estate market in Mumbai are not expected to change, as demand will not stop dropping until prices and interest rates fall to affordable levels.

Mumbai isn’t the only city in India to face declines in the number of home sales, as Delhi is also facing a similar situation.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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