Good news! Housing prices to fall in Mumbai

Residential property prices in Mumbai are likely to fall by 10 per cent this year, but rise marginally in the NCR, a Crisil study said.

The extent of price decline would vary widely in Mumbai, whereas prices may inch up moderately across national capital region (NCR), it said.

Mumbai and NCR would together account for more than half the 1.5 billion sq ft housing supply planned in India's 10 leading cities up to 2013, the research firm said.

"We expect prices in Mumbai to decline by 8-10 per cent in 2011. In NCR, prices will move up marginally because of relatively better affordability," Crisil said.

While falling demand and rising interest rates are likely to bring down prices of residential properties in Mumbai, deep pockets of residents of national capital region may push up the rates marginally, it said.

"Reduced affordability and a likely increase in interest rates by the RBI will subdue demand and depress housing prices in Mumbai in 2011," Crisil Research Director Nagarajan Narasimhan said.

On NCR he said,"...relatively better affordability will prop prices despite any increase in interest rates".

The extent of decline in the property prices would vary widely across Mumbai, while prices would go up uniformly across areas in NCR, Crisil added.

The study had taken into account the price trend across the western suburbs (Goregaon, Malad, Kandivali and Borivali), Thane and central suburbs (Dombivli and Kalyan) in Mumbai. For NCR, it took in account the rates available in Noida and the outskirts of Ghaziabad and Faridabad.

Over 2010, the housing prices escalated up to 43 per cent in some pockets of Mumbai, while prices in NCR went up only by 6 per cent.