Home maker Sumita Sarin?s hunt for the past six months to buy a house in Mumbai is turning out to be an ordeal. ?Sometimes the properties disappointed us and sometimes the exorbitant prices,? says Sarin, 29. Her hopes of a dream home in Diwali is also thinning.

?We were hoping that we could close something by Diwali in hopes of good discounts, but we are disappointed,? says Sarin. Analysts and consultants say prices have risen even as developers offer discounts to the catalogue rates.

?Catalogue rates are up by about 10% in the last six months and by about 20% in the last one year,? says Hansraj Singh, analyst at domestic brokerage IDBI Capital Markets Services. ?Prices have risen anywhere between 40-50% above their previous peak in 2008 in just 18-24 months. The hikes are part of developers? well thought out strategy to protect margins in a falling market,? he added. Consultants too agree with analysts.

?Developers have not reduced prices much,? says Ramesh Nair, MD (west India), Jones Lang LaSalle Property Consultants India (JLL). ?They are only offering freebies like lower floor rise rates or overseas trips, but there is no pure price decrease which is what customers are looking for.?

Developers say fresh supply is hampered by delay in approvals and higher interest rates. ?We are expecting to launch a boutique project in Mahim during the ongoing festivals, subject to pending approvals coming through,? says Bharat Dhuppar, chief marketing officer at Omkar Realtors & Developers.

Oberoi Realty is not launching any project in Diwali unlike last year. ?There is lot of supply to be sold in existing projects,? Vikas Oberoi, MD at Oberoi Realty, told analysts in a conference call after announcing Q2 results.

Most developers are rigid in their pricing and are offering only common discounts like waiving stamp duty, registration and parking charges, which are ?inadequate in the current context,? says a report by domestic brokerage Motilal Oswal released on October 12, 2011.

In the past six months sales deals have dropped. ?Customer sentiment has taken a beating with economic uncertainty in global markets,? says Anshuman Magazine, CMD at real estate consultant CB Richard Ellis-South Asia. ?Volatility in stock market, rise in monthly instalments after interest rates hikes are making it unaffordable for customers to buy properties.?

Property sales registration in Mumbai for August 2011 touched a new low in more than two years, falling around 24% year-on-year to 4,611, according to the data sourced from the director general of registrations, Mumbai. In August 2010, 6,100 sales were registered, data released by Mumbai-based brokerage Prabhudas Lilladher showed.

The number of property sales registered fell further as it touched a 29 month low for the month of September. Altogether 4,181 properties were registered in September 2011 down by 21% from same month last year, according to the data sourced from the director general of registrations, Mumbai. In September 2010, 5,303 sales were registered.

Some developers say customers do not wait for festivals to buy property. ?We have been regularly launching projects,? spokesperson of Unitech says. ?The impact of festivals on sales and bookings is only marginal because customers go for quality residential projects as and when the need arises.?

But some developers have been unable to keep possession deadlines adding to customers? woes of paying both rent and interest on loans. Rahul Sharma, 28, a software engineer at a Pune-based IT firm will soon be renewing his house lease contract. ?I was promised possession this November,? says Sharma. ?Though the work at the site is going on, the developer has defaulted on the delivery date.? He did not want to name the builder as he fears his deal may have problems. ?Now I will have to renew my house lease contract at a higher rate and start paying my EMI too,? Sharma added.