property prices in mumbai still soaring
News Posted On: 15 April 2011
Property prices for luxury homes in Mumbai have risen by almost 20% which is the second highest rate in the world, and just ahead of Singapore. However some analysts are worried that an asset price bubble is forming, especially as most currencies in Asia are considered under-priced when compared to the US dollar which has translated into steep price rises for luxury property.
According to Jones Lang LaSalle sales volumes are already slowing and there is a glut of residential properties on the market that could prompt a price correction. It anticipates that this glut will last for a couple of years due to the numbers of new developments coming on the market.
Over the past year or so developers in Mumbai have been focusing on residential markets and bought land at expensive rates. Slow sales mean that many are being forced to drop their prices and Sanjay Dutt, chief executive officer of Jones Lang LaSalle India, estimates there could be a 15% to 25% price correction. He also commented that 35% of property recently sold in Mumbai has been snapped up by speculators, which means there is the risk that these properties will soon be back on the market.
It's expected that the in property sales will continue to be slow over the next few months due to the monsoon and holiday season. There have already been minor price corrections in areas such as Parel, Bandra, Andheri, Kurla, Muland and Goreagon. Residential property rates in Mumbai are currently at 2008 levels.
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