MUMBAI: Finally, it seems the overall slowdown that has engulfed the economy has hit Mumbai, the nation's costliest property market, as well, with prices seen falling marginally next year after remaining stable in 2019.
The Mumbai real estate market is more known for its price stability despite over 2.21 lakh ready-to-move-in units remaining unsold as of September this year.
In the past one decade alone, the city has seen a 12.7 percent appreciation in prime residential properties.
In the third quarter of 2019, Mumbai was the 28th fastest-growing prime residential market in the world, registering an 80 bps annual increase in average capital value, even as prices actually remained stable in the city.
According to a study by property consultant Knight Frank, the average capital value of prime residential properties in the megapolis is Rs 64,775 per sqft, making it the most expensive city for buying luxury homes.
"Price appreciation of both prime residential properties, and luxury homes in areas such as Cuffe Parade, Napean Sea Road, Colaba, Lower Parel, Worli, Tardeo, Juhu, BKC, Santacruz (W), Bandra (W), Khar(W) and Prabhadevi are set to decline by 1 percent in 2020," say the report.
Mumbai ranks seventh in the list of global cities in terms of expected price appreciation of prime residential properties.
Both demand and sale of prime residential properties in the city are expected to see a slight fall, while the supply of luxury homes is estimated to drop significantly next year, says the report.
Even in 2019, there has been some let up prices of prime properties in the city, which will see further depreciation in 2020, Knight Frank India chairman Shishir Baijal said.
He said the additional 1 percent stamp duty being levied by Maharashtra will make buyer more cautious going forward. With the increase in levy, the states charges 6 percent stamp duty now.
"In the last decade, Mumbai has seen a 12.7 percent price appreciation in prime residential properties. The index also highlights the change in prime residential prices for all 45 cities tracked by the index averaged 1.1 percent in Q3, growing at the slowest rate in a decade," the study says.
Paris leads the prime residential forecast for 2020 with an expected price growth of 7 percent, followed by Berlin and Miami tied with a 5 percent gain each, and Geneva and Sydney tied at the third place, with an expected price growth of 4 percent each.