Mumbai’s residential property prices may see some ‘correction’ in 2020: Report
Despite a stable 2019, real estate prices in the country’s costliest property market – Mumbai – are set to witness a marginal decline in the year 2020, according to a report by property consultant Knight Frank.
The Mumbai real estate market is considered among the most stable in the world. A testament to that is the fact that prices have remained stable all year despite an unsold inventory of 2.21 lakh ready-to-move-in units.
Moreover, in the past decade alone, the city has seen a 12.7 percent appreciation in prime residential properties.
In the third quarter of 2019, Mumbai was the 28th fastest-growing prime residential market in the world, registering an 80 bps annual increase in average capital value, even as prices actually remained stable in the city.
According to the Prime Global Forecast 2020 report by Knight Frank, the average capital value of prime residential properties in the megapolis is Rs 64,775 per sqft, making it the most expensive city for buying luxury homes.
“Price appreciation of both prime residential properties, and luxury homes in areas such as Cuffe Parade, Napean Sea Road, Colaba, Lower Parel, Worli, Tardeo, Juhu, BKC, Santacruz (W), Bandra (W), Khar(W) and Prabhadevi are set to decline by 1 percent in 2020,” the report said.
Mumbai ranks seventh in the list of global cities in terms of expected price appreciation of prime residential properties.
Both demand and sale of prime residential properties in the city are expected to see a slight fall, while the supply of luxury homes is estimated to drop significantly next year, says the report.
While some prime properties have already witnessed a small decline this year, further depreciation is likely in 2020, Knight Frank India Chairman, Shishir Baijal, said.
According to Baijal, the additional 1 percent stamp duty being levied by Maharashtra will make the buyer more cautious going forward. The state currently charges a 6 percent stamp duty.
“In the last decade, Mumbai has seen a 12.7 percent price appreciation in prime residential properties. The index also highlights the change in prime residential prices for all 45 cities tracked by the index averaged 1.1 percent in Q3, growing at the slowest rate in a decade,” the study says.
Meanwhile, Paris leads the prime residential forecast for 2020 with expected price growth of 7 percent, followed by Berlin and Miami tied with a 5 percent gain each.