Customers who drove a hard bargain got reductions of up to 10% in apartment prices, in the form of cash discounts or freebies, says Knight Frank's latest report on the sector.
Mumbai:India's financial capital Mumbai witnessed a decline in residential property prices for the first time in a decade past year following a crackdown on undeclared cash, new consumer protections and the roll-out of a nationwide sales tax, according to Knight Frank.
The report said that the share of affordable homes among new projects rocket from 53 per cent in 2016 to 83 per cent in 2017 indicating developers' focus towards properties within Rs 5 lakh price bracket.
Das said that price correction downwards would be more pronounced in the coming months.
The Knight Frank report released Wednesday said prices in other Indian cities had reduced too. The base price has come down by 5% which translates into an effective price benefit of 11-12% for buyers.
"Until the end of 2017, India's residential sector had shrunk to a fraction of its size in less than a decade", said Shishir Baijal, chairman and managing director, Knight Frank India, adding that "all in all, it is a buyers' market today".
Das said that "in terms of sales, the Mumbai market recorded 19% uptick in H2 2017 over the demonetisation-hit same period past year, however overall sales volumes reflect a declining pattern".
Factors such as piling up of inventory, lack of consumer confidence due to litigation and infrastructure delays, and policy initiatives like RERA and GST have adversely affected market dynamics, resulting in a break of momentum for new project launches in the region. "This includes bouquet of incentives such as waivers on stamp duty, floor rise and assured rental schemes".
"The residential market also witnessed a drop of 86 per cent and 56 per cent in the half yearly launches and sales respectively, from the peak levels during H1 2011". That's great news for homebuyers because average asking prices in the Chennai residential real estate market have come down by 3% since 2016.
In case of office space, new completions increased 7 per cent in 2017 to 32.7 million sqft compared to 30.7 million sqft in 2016, but not at par with demand. Home affordability remains the highest in Mumbai at 7.8 times a family's annual income, compared to 11 times annual income in 2010. "The pace at which developers align themselves to the new regulatory norms and launch new products in the right ticket sizes that appeal to the homebuyer's interests, will determine the trajectory of the market going forward".