Home Sales in Mumbai dips to a 3 year Low

According to a research Mumbai's residential home sales dropped to a three-year low in the last quarter on 2011. The research was carried out by a Mumbai real estate research company. The firm points out that the high property prices and high interest rates is causing this dip.

There was a plunge of 17% in the property rates from the third quarter. The city is yet to clear the unsold inventory. The unsold inventory climbed to a record 119.85 million square feet, according to the research. The firm estimates 44 months for the clearance of the existing stock at the current absorption rate. According to the Head of the firm, a "healthy market" normally maintains about eight months of inventory. The firm expects a further dip in property prices in this context.

Cities in south, Bangalore and Chennai saw the largest sales increase last quarter. Sales in Bangalore rose to 54% the last quarter where as Chennai sold a whopping 91% more homes. Both cities posted their highest quarterly sales in at least three years, while prices remained little changed from the earlier quarter.