Divergent housing price trends to prevail in Mumbai, NCR: CRISIL
13 January 2011
Divergent price trends prevail during the year in Mumbai and the National Capital Region (NCR), the two largest residential real estate markets in India.
According to CRISIL Research, while rising marginally in the NCR uniformly in 2011, prices of houses are likely to decline in Mumbai, with the extent of the decline varying widely across the metropolis.
CRISIL Research studied the price trend in three major supply pockets in Mumbai - western suburbs (Goregaon, Malad, Kandivali and Borivali), Thane (Ghodbunder Road), and central suburbs (Dombivli and Kalyan) in Mumbai; and Noida and the outskirts of Ghaziabad and Faridabad in NCR.
"Accounting for more than 50 per cent of total planned supply in each city, these major supply pockets would represent the trend in housing prices in the whole city," the study notes. Mumbai and NCR would together account for more than half the 1.5-billion sq ft housing supply planned in India's 10 leading cities up to 2013.
In Mumbai, falling demand, owing to diminished affordability, and rising interest rates will trigger a decline in prices in 2011. Prices of houses had soared by 43 per cent in 2010, in the city's three major supply pockets, surpassing their peak values attained in the first half of 2008, by 26 per cent, thereby adversely affecting housing affordability.
CRISIL Research therefore expects prices in Mumbai to decline by 8-10 per cent in 2011.