Prices of super-luxury apartments in Central Mumbai are set to decline further after a 25-30 percent fall over the last 3-4 years, said a report by broking firm CLSA. The prices quoted by investors looking to sell out, have declined 10-15 percent following the slowdown since the outbreak of the COVID-19 pandemic, the CLSA report said.
“With the further slowdown in demand, current asking prices of few investors suggest losses of 30-35 percent on their investments, signalling distress sales,” said the CLSA report.
“Our interactions with property brokers highlight prices of to be on the brink of further decline (after having fallen 25-30 percent over the past 3-4 years),” the CLSA report said.
Demand concern and weak pricing are likely to impact profitability and monetisation timelines of property developers, the report said, adding that Oberoi Realty, a dominant player in that nice segment, could bear the brunt of the weak prices.
“While no material transactions have happened over the past two months due to the lockdown, our interactions with property brokers suggest price expectations by investors in large projects in central Mumbai (Omkar 1973, Lodha World Towers and Lodha The Park) have declined 10-15 percent (Rs 7-7.5 crore for 3-BHK currently from Rs 8-8.5 crore pre-COVID),” the CLSA report said.
Usually, prices of luxury apartments increase after the project receives the Occupation Certificate. However, over the last 1-2 years, prices have declined 25-30 percent after receiving the OC, as many who bought the apartments as an investment, are now looking to sell, the CLSA report said. CNBC