2010 Mumbai sales lower than 2007, though prices head north

The Mumbai real estate which had supposedly picked up pace is still not able to reach the sales highs of 2007, say industry experts. Though developers say otherwise.

A data collated by international property consultants Jones LangLa Salle India’s research team Real Estate Investment Services (REIS), says that the number of units sold in Mumbai from January to September 2010 is 6878 units as compared to 11,857 units sold in 2007 for the full year. Interestingly, the top seven metro cities which includes Mumbai, NCR, Bangalore, Chennai, Pune, Hyderabad and Kolkata has surpassed the total number of units sold in Q3CL2010 as compared to full year sales figures of 2007 when it booked sales of 85,810 units as compared to 1,38,331 units at present. The Mumbai data does not include Thane, Navi Mumbai, Vasai and Virar.

Another Indian realty data aggregator’s data which covers the entire Mumbai Metropolitan region (MMR) shows that in 2007, the peak sales figure was registered for the month of September with sales of 7.58 msft which has been the highest till date in last three years. In 2010, the peak sales have been of 5.63 msft, which was recorded for july whereas in 2009, the Christmas month had ring in sales of 6.42 msft, peak for that year.

Also the stamp duty registration data collected from the registrars office shows that the last quarter of every calendar year records peak in registration numbers for the entire year, but this year the registration data has been falling off since July. July had recorded registration of 7262 units, and since then the numbers have tapered off.

Even the 6258 documents registered for October failed to bring cheers.

Experts attribute the drop in property sales to sharp increase in prices across the city.

Ambar Maheshwari, director, real estate investment advisory, DTZ International, an international property consultants said, “Unit value wise I would say that 2010 sales were higher because the way people bought as if there was no tomorrow but in 2010 the price tag of transactions is quite higher.”

Abhishek lodha, one of the present generation developer, says, “For us as a company this year has been better, as we have sold approximately 7.5 msft till December whereas in 2007 we had sold approximately 4 msft. The average sale price of 2010 is higher by 2007 but by merely 2-5% not more than that though three years have lapsed.”

Vikas Oberoi, another developer from Mumbai says, “We have had a better 2010 with regards to profitability numbers than 2007, though our last quarter numbers are low we will be booking the numbers by the end of this fiscal.”

An analyst from top five brokerages in India, says, “In Mumbai, realty prices have shot up by 20-30% higher than 2007 prices which is quite steep in comparison to price hikes in other cities. In Bangalore and Chennai sales are up by 23% for this quarter whereas Mumbai hasn’t shown any improvement in sales. Even Delhi is showing upward movement only Noida is moderately down due to oversupply.”

A research note written by Unmesh Sharma and released by Macquire on November 25, says, “However, recent memories of the boom of 2007 (followed by 2008’s crisis) give rise to some scepticism. Note that residential prices in parts of Mumbai and the NCR are now higher than the 2007 peak despite a drop in affordability and hence volumes. On the other hand, some markets such as Bangalore are seeing an improvement in volumes even as prices inch up. In some areas in NCR suburbs, speculators have driven volumes to more than twice the historic high of 2007. We believe these liquidity-driven phenomena are unlikely to sustain beyond the next 6-12 months.”