"Apartment sales have gone down by 20 to 30 per cent in Mumbai. Developers are doling out goodies like stamp duty relief, free parking and interiors to boost sales," said Rajiv Sabharwal, head, retail assets, ICICI Bank.
Crucially, developers are not cutting prices.
"Developers can not cut prices because once you do that, it signals the start of a downward spiral. They are holding on to the prices to maintain the momentum," said Rajesh Mehta, a leading property consultant in Mumbai, adding: "April and May are the key months as far as property deals go. If transactions do not pick up, prices of apartments will fall at least 10 to 15 per cent".
Traditionally a stock market boom has a direct impact on real estate prices. However, the near 5000-points fall in Bombay Stock Exchange Sensex from its peak in January 2008 has wiped out much investor wealth.
This reversal of fortunes is expected to have an immediate impact on residential real estate prices. The last two or three years have seen prices escalate across the country.
Image: Work on the Mega City project the 'Bandra Worli Sea Link' is almost at a stand still. The Bandra Worli Sea Link is the first phase of the Western Freeway Sea Link (Bandra to Nariman Point), the second phase being from Worli to Nariman Point, and is designed to ease traffic congestion in the city.
Photograph: Sebastian D'Souza/AFP/Getty Images
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