Mumbai developers run for cover, cut property prices

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The developer has blinked. Prospective buyers who were waiting for correction in realty prices should rejoice, as city developers have started bringing down property prices by 10% to 30%.

Manohar Shroff, general secretary of the Maharashtra Chambers of Housing Industry, Navi Mumbai, admitted that developers had started reducing property rates to survive in the sluggish market. Higher interest rates, rising inflation and increasing construction costs have not only dampened demand but also investor desire to book and own more flats.

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Pankaj Kapoor, managing director of Liases and Foras, the real research firm said, the cash flow in the realty market has dried up in the last two years, and this has spread panic among developers.

"Earlier, the investors were helping developers by pumping enormous amounts of cash in the property market. Now, the investors themselves are in deep financial trouble, as they could not sell the properties they had bought earlier. So, the market is quite tight," he said.