“Apartments are not easily available for rent in Mumbai to individuals, as owners prefer to lease only to corporates, therefore people look to buy a house,” says Rajesh Jogani, a property investor in Mumbai.
But high mortgage rates , which are between 10 percent and 12 percent, have created a cash crunch for buyers resulting in a dip in volumes. According to industry estimates, sales are down by more than 40 percent over the past one year.
“Demand has slowed, but supply has slowed even faster,” says Puri, adding that the approval of new projects over the past 14 months has been very slow as the government was in the middle of changing regulations. Even though the new rules are now in place it will take at least another four years before fresh supply can hit the ground, he says.
This tightness in supply has given existing property owners greater bargaining power. “If you have holding power and can wait it out for a few months, you are sure to get a good price,” says Jogani, who got 20 percent more than his asking price for his apartment in central Mumbai after waiting it out for six to eight months.
“If earlier there were 10 buyers for one apartment in Mumbai, now there are 5, but they are still there,” says Puri.
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