30% Rise in Mumbai Home Sales

Mumbai home prices have jumped about 30 percent over the past six months, leading to a drop in home sales in India’s financial capital as higher prices deter buyers, Knight Frank LLP said. “Residential property prices have risen too much too fast,” Pranay Vakil, chairman of Knight Frank (India) Pvt. said in an interview in Mumbai. “We are seeing resistance at higher prices and as a result volumes have declined.” The average sale price of existing homes between 1,000 square feet (93 square meters) and 2,000 square feet has climbed 11 percent to 20,000 ($450) a square foot in North Mumbai in the fourth quarter from the three months to Sept. 30, according to data from property consultant Cushman & Wakefield. That was the highest in at least eight quarters.

Banks likely to raise realty loan rates on real estate projects

The Reserve Bank of India (RBI) may make borrowing more expensive for builders by asking banks to set aside more capital for loans to commercial real estate projects. A higher capital requirement will force banks to raise interest rate on such loans.

The Unknown Facts about Real Estate in India

There are many unknown facts about India Properties.In a country where there is traditionally the predominance of the agricultural sector, that sector continues to be greatest source of employment generation. It may be an unknown fact that the Indian real estate sector is the second greatest employment provider in the country. This sector significantly contributes to the national income and Gross Domestic Product and it is expected there will be an average 10% increase annually in these aspects. The recent slump in the property market in India consequent upon the global economic downturn is reported to be evening out and the industry is projected to register considerable growth in the coming years. The observation of the international property consultants Jones Lang LaSalle is significant in this context: “economic recovery during CY 2010-11 is likely to reinvigorate the interest of foreign investors in India’s real estate market. We expect enhanced capital inflow in the real estate sector in the medium-to-long-term”. Again, Jones Lang LaSalle says, the faster economic growth of the nations like India, China, Brazil and Russia will pay the way for faster recovery of the real estate sector in those countries when compared with countries like the US and the UK.