Brushing aside concerns of high property prices, the Maharashtra Chamber of Housing Industry (MCHI) says there is little scope of reducing prices.

Ahead of its annual expo between April 14 and 17, MCHI was categorical that current prices in the Mumbai Metropolitan region were in line with the overall price rise seen across products and commodities.

Prices rose sharply across the city in 2010 and led to a dip in property sales. A Kotak client report said property prices had gone up 40 per cent in 2010 and in many locations surpassed the 2008 highs.

Mr Sunil Mantri, President, MCHI while stating that developers were not stating that prices would rise or drop, said the current prices were a factor of demand-supply dynamics.

However, the registration offices appear to be free of the crowds that usually flock them.

A bank officer who went to the Property Registrar office in suburban Thane on April 1 to register his rental deed was in for a surprise. There were no long queues, no waiting and hanging round the premises for hours. He was called in and the job was done in 20 minutes.

So was the case at Dadar Registrar office, where a broker said it was near empty and his client was called in as soon as he was sighted by the clerk.

REALTY INDEX DOWN

Mr Pujit Agarwal, Managing Director, Orbit Corporation, also an MCHI member, was more candid in his response: “Let us face it, we are bleeding.” A Standard Chartered Equity Research report said the Realty Index is near its lifetime low seen in 2008. However, 2011 was not 2008, as inventory has halved, affordability has improved and companies are healthier.

Mr Ramesh Nair, Managing Director - West India, Jones Lang LaSalle India, said the last six months had 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.

He said many home buyers are playing the waiting game, anticipating a further correction.

The key reasons behind this slowdown are higher prices, higher interest rates impacting affordability, lack of liquidity and scams diluting investor sentiment.

Less speculation

Mr Nair said many developers and agents admit that sales have slowed down. Gone are the days when large number of apartments was sold during launch itself.

The trend of short-term speculators booking apartments at pre-launch or launch prices and selling them a few months later at higher prices (as in early 2010) has reduced considerably.

He said developers now were offering significantly lower rates to customers willing to cough up a 30-40 per cent down payment.

Corporates were rushing to divest their owned apartments that are non-core to their business, anticipating a further correction in prices.

The current correction may last for as much as four-five months, or even out during the festive season.

Meanwhile, Mumbai's developers will play a cautious game and avoid launching too many large projects in the next couple of quarters, he added.

Given the holding power of Mumbai realtors, the response to the MCHI expo will indicate which way the Mumbai residential market will head in the short term, ever since prices climbed back to the 2008 levels.

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