According to some property consultants in Mumbai, prices of super-luxury apartments in some locations like Central Mumbai may see further correction due to lukewarm response from property investors. Usually, property investors account for 25-30% of the buyers of such projects and these investors have turned hesitant buyers since last 2-3 months due to outbreak of COVID-19 and subsequent nationwide lockdown. Even before the lockdown price had seen a correction of 25-30% over the past 3-4 years (especially after demonetisation). Following the Covid-19 led slowdown, the asking price of investors has declined by 10%-15% over the past 2-3 months.
Interestingly, no material transactions have happened over the past two months due to the lockdown. According to some leading property consultants, investors’ offer has come down to Rs 7-7.5 crore for 3 BHK apartments as against earlier offer of Rs 8-8.5 crore. Some of the projects which are facing pricing corrections are Omkar1973, Lodha World Towers and Lodha The Park.
What is even more surprising is the fact that most of the luxury projects in areas like Central Mumbai have seen price corrections post-receipt of occupation certificates. This is against past trend when price used to appreciate post-receipt of OCs. According to brokers, key projects in central Mumbai have seen sharp declines in prices by25%-30% within 1-2 years from the receipt of the OC.
Most of the investors seem to have already incurred loss of 20-25% and any expectation of further erosion in value may force them to go for distress selling.