on to higher prices. A limit on supply further helps them. This may not be the case in other cities that are facing an oversupply situation.
Developers in Mumbai argue that there is a limit to the reduction in price that a developer can offer. “Prices can’t come down beyond a point as the cost of land is high, the taxes have gone up significantly and the overall cost for developers have risen,” said Niranjan Hiranandani, co-founder and MD, Hiranandani Group.
He, however, accepted that in the short-term, the market is going to remain slow but the prices will take off in the medium to long run because of high real demand.
Should investors look at this market?
While the price fall has only made things better for the first time buyer, it is a tricky market for the investors. There may be good deals available, but investors need to be careful about the quality, price and location. “Investors need to have a holding period of around two years,” said Magazine, adding that investors will have to bring down expectation as returns available in the past may not be there going forward.