Indian property prices need to fall

Mumbai at Dusk

News on India

International property consultants have called for reduction in residential property prices in India, as a consequence of a fall in demand, which is down by up to 40% across some parts of the country during the last three months.

Purchaser demand is reported to have fallen on the back of unaffordable prices, appreciating interest and borrowing rates, as well as a weakening economy, among other factors.

"Developers must now be ready to lower their selling prices in order to revive demand. Once this happens, we will see a definite upswing in residential real estate sales again," said Anuj Puri, head of Jones Lang LaSalle Meghraj (JLLM).

Vikas Oberoi, managing director of Mumbai-based Oberoi Constructions, said: "While ready apartments are being sold, those under construction are not finding enough buyers."

Consultants say that the slump in demand comes following a fall in overseas money pouring into the country, especially from the USA.

Puri adds: "The Indian real estate market is likely to under-perform in the next six to 12 months."

While most developers aren’t actually reducing asking prices, unofficially, most are willing to accept lower prices under negotiations, according to various property investors.

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Information provided by Homes Overseas | © PropertyIndex.com 2008 | Last Updated: 17 October 2008