Mumbai: The prices of new premium and luxury homes in certain pockets of Mumbai fell as much as 12% in the past two months after demonetisation impacted the real estate market, brokers and real estate advisors said.

Three Mumbai-based brokers Mint spoke to said while sales have started to slowly pick up in the past few weeks, some builders in the mid- to high-end segments are willing to reduce their quoted price for some of the ready-to-move-in properties.

According to estimates by Magicbricks, prices of premium and luxury homes have dropped 5-8% in areas with a large stock of completed projects. In the resale or secondary market, 60% of individual owners and sellers listed on the site are revising their prices by at least 4%, the online property listing site said.

In Mumbai’s western suburbs of Bandra and Santacruz, some transactions happened at prices 6-10% below what the builders initially quoted, said Prakkash Rohira, founder of Karma Realtors, a real estate agency.

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“Ready possession properties are selling faster than under-construction ones as it is need-based. Developers are willing to negotiate and transactions are currently happening at much lower than the quoted prices in a few micro-markets in Mumbai while for under-construction projects, various payment schemes have come up," Rohira said.

According to Avinash Mordani, who runs real estate agency Primelinks Realtors and Relocators at Khar in Mumbai, prices at the high end segment have fallen marginally while in the secondary resale market, prices have dropped by around 5-10%. However, deals are slow as there is a mismatch in expectations between the buyer and the seller, he said.

“Now, even genuine buyers are expecting much lower than the quoted price, while most developers are holding on to their prices. Hence, deals have significantly slowed. If this continues for another month, we will see a major correction by up to 15%," said Mordani.

According to Jayashree Kurup, head-content and research, Magicbricks, the volume of searches has gone up significantly in the past one-and-a-half month, but consumers are taking more time to buy and everyone is hoping further price drop. She said luxury and secondary resale markets have seen the maximum correction while in the peripherals of the city, the price drop is smaller, ranging 3-4%.

“What I have seen is that if you are a serious buyer and when they sit across the table, depending upon what is the leeway, 5-12% downward negotiation is happening," she said.

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Another Mumbai-based real estate broker, one of the three cited earlier, said there are big gaps between what the owner has quoted and the final sale price. A few premium ready-to-move-in properties in Worli, Bandra and Parel have seen a price drop of 11-12%, this broker said.

“Though these price drops are sporadic and do not represent the entire market, so much negotiations did not happen before. There was no such big margin. Earlier, after negotiation, builders would be willing to come down by just about 3-5%. But now, we are seeing a much bigger drop," the person said.

Real estate advisers also agreed there are price corrections in certain places with a large number of unsold homes, while few other micromarkets in the suburbs with demand-supply mismatch are resisting the drop. “Based on what I see and the interaction with developers and buyers, there have been 5-8% correction in the last month-and-a-half. Builders are willing to sit across the table and negotiate prices," said Gulam Zia, executive director, Knight Frank, a property consultant.

However, builders said it has been a buyers’ market for the past two years and like any other industry, demonetization has disrupted the real estate sector as well. “Prices have been gradually correcting in the past two years. There is no further room for correction. So, now, whatever we see is the best kind of price across geographies," said Getamber Anand, president, Confederation of Real Estate Developer’s Associations of India.

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