MUMBAI: India’s most expensive real estate market is seeing a demand pullback in luxury
real estate projects in and around areas designated Covid-19 hotspots in Mumbai as wealthy homebuyers adopt a wait-and-watch approach on high-ticket deals.
The luxury segment will be most susceptible to the Covid-19 shock amongst all real estate segments.
Both demand and prices of large super-premium apartments are expected to continue easing further though prices have softened in the last few years.
“Luxury property market in south central Mumbai has been witnessing downward pressure to the tune of 20-25% owing to oversupply over the last 2-3 years. And post-Covid-19, clients are seeking 10-15% discounts over the already discounted price and that is making it difficult to conclude deals,” said Himanshu Parikh of Himanshu Realty, a realtor operating in south and central Mumbai.
Parikh said the luxury market in these areas are unlikely to recover at least for the next 6-9 months due uncertainty around economic activity and low customer demand.
Brokers say that even earlier bookings could be cancelled if the number of infected people in hotspots continues to rise.
“There’s a possibility of clients reviewing their bookings in projects in all aspects, especially those that are in close proximity to worst-affected hotspots. In some cases, the prospective clients have responded that they are rethinking their decision. The pattern of enquiries from clients has certainly changed,” said Yashika Rohiira, director, Karma Realtors that focuses on luxury properties mainly in south and western part of Mumbai.
Rohiira said that for luxury apartments, chambers for domestic helps were earlier a preference, but now most certainly a need as indicated by recent discussions with clients in premium category.
Luxury residential property market of south central Mumbai had emerged as an alternative for the plush set and the country’s most expensive micro-market is south Mumbai.
In the last 2-3 years, homebuyers focused on south-central Mumbai are spoilt for choice as developers have been trying to recalibrate their product offerings to push demand.
Given the high pricing and large size of these apartments, the luxury segment is relatively discretionary and the buyer can defer the actual deal to ensure a good bargain.
Brokers, therefore, are of view that developers with limited liquidity options, in the current scenario, will have to give in to the pressure and settle for lower price.
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