Property prices in Mumbai drop by 5.6% - says Makaan.com Property Index (MPI)
A potential drop in property prices in Mumbai was widely discussed and debated for the past few months but the latest release of Makaan.com Property Index (MPI) actually confirms this trend. As per the MPI for October 2011, the property prices in Mumbai have actually dropped by 5.6% in the last three months. The Mumbai property index for October month stood at 1464 compared with 1551 in the month of July 2011. The drop in prices seem to be a short term phenomenon as Mumbai city has registered a price appreciation over the past 12 months period. The Mumbai property index was at 1219 in October 2010 compared to 1551 in October this year, indicating a jump of 20.2%.
If one were to analyze the property prices trends in other Indian cities (over the past three months), one observes that cities like Hyderabad, Bangalore, and Ahmedabad have also started to move southwards. The fall in these cities is to the tune of 21.6%, 7.8% and 2.8% respectively. Bucking the trend are property prices in Kolkata, Pune, Chennai and Delhi NCR that have risen by 17.4%, 12.4%, 9.1% and 4.2% respectively, during the same period. At the National level, the MPI has remained stable at 1483 compared with 1495 in the corresponding month last quarter, which is a small drop of 0.8%.
Commenting on the findings Aditya Verma, EVP & COO, Makaan.com says, “Indian market is undergoing a short term correction in property prices which is actually healthy for the market. The drop in property prices in Mumbai can be attributed to the to drop in transactions over the past 6-8 months, high property prices, high home loan interest rates and unsold stock of ready to move apartments. This drop will lead to some revival of buying interest. We expect the prices to remain range bound over the medium term (6-9 months). A meaningful revival is expected only by July-Sept 2012 when price correction will be additionally supported by softening of home loan rates.
Makaan.com Property Index (MPI) is part of the knowledge division of Makaan.com called MakaanIQ that has been bringing out property intelligence & research reports for the benefit of homebuyers and real estate industry. MakaanIQ was the first to predict a shift towards affordable housing in first half of 2008. The Index is another attempt at bringing objective information and analysis for the benefit of the Industry and the country. This index is based on minimum database size of 20,000 data points every month and the analysis has been drawn over a period starting Jan’09. The complex algorithm takes into account the property prices as base and then factors in the demand and supply of residential properties for each of the cities covered by it. Care has been taken to give weight age to cities in line with the size of underlying property market. The prices of properties were obtained across micro-markets through property listings on the website as well as Makaan.com’s nationwide sales force.
Last Updated: Tue Dec 13 2011