Price Cut, a strong possibility : PL

By Accommodation Times Bureau
Q1FY13 Mumbai real estate sales registrations have been slightly stronger, up 6% on a sequential basis. The March-May period witnessed registrations above the 5,000 mark as against the dismal levels being witnessed in the period prior to that.

The month of June saw registrations a tad below the 5,000 mark. The incremental demand could be on account of first-time home buyers taking the plunge in the absence of price correction and from NRI-led demand due to significant weakening of the rupee.

“In the absence of a credible fiscal consolidation program on part of the government and with RBI`s ongoing concerns on inflationary pressures, post the 50 bps repo rate cut witnessed earlier, RBI has kept rates unchanged. With interest rates remaining firm the woes of the industry are likely to continue. With developers sitting on highly leveraged balance sheets, a price cut becomes a strong possibility,“ said Prabhudas Lilladher.

“We believe the challenges to the sale scenario in the city continue to remain high and more needs to happen to correct the stressed affordability equation amid high property prices. Thus, we maintain our cautious stance on the city`s realty scenario. The steeply falling trend indicated by the trailing 3-month registration chart in the September 2010 -November 2011 period has been arrested and the trend was slightly upwards in the March 2012 – May 2012 period. However, this can hardly be termed as a recover. Although lease transactions seem to be clocking new highs every month, the scenario for commercial real estate in the city remains terribly weak, with vacancies at 20%.`





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