The triple effects of demonetisation, GST implementation and slow economic growth has led to a decline in real estate prices in Mumbai.

Real estate consulting firm Knight Frank India in its half yearly report has confirmed this trend. It said, for the first time in a decade, Mumbai witnessed a decline in quoted prices. “The weighted average prices were down 5% YoY in 2017,” it said.

“For the first time in this decade the Mumbai market has experienced a drop in residential prices. Unlike the conventional narrative developers cut prices to offload their unsold inventory,” Dr. Samantak Das, Chief Economist & National Director – Research said.

“The base price has come down by 5% which translates into an effective price benefit of 11-12% for buyers. This includes bouquet of incentives such as waivers on stamp duty, floor rise and assured rental schemes,” he added.

New project unveiling in H2 2017 plummeted by 23% YoY as the focus of developers shifted towards completing existing projects. “From an annual perspective 2017 saw 32% fewer launches YoY and new projects and same was down by a staggering 83% from peak in 2010,” as per the report.

Developers were offering bouquet of sops such as 24-month rent assurance, stamp duty waivers, no floor rise charges and other preferential location charge and gifts, it said. “Collectively discounts add up to 11–12%,” the report said.

Unsold inventory in 2017 came down by 25% YoY indicating a healthier QTS of 7.9 quarters as compared to more than two years until the end of 2016, it added. In terms of sales the Mumbai market recorded 19% uptick in H2 2017 over the demonetisation-hit same period last year, however overall sales volumes reflect a declining pattern.

According to the report the office market witnessed new-found buoyancy with new completions recording double digit growth for the first time since 2012

As per the report new office space supply hit double digits for the first time since 2012, 76% higher YOY.