Impact of Coronavirus Outbreak on Mumbai's Real Estate

Good news for homebuyers in India's priciest property market

While the COVID-19 pandemic halts the world in a standstill, the world economy has been affected adversely. As businesses are forced to put on the brakes, experts estimate that the global GDP is set to take a hit. Globally, the virus has infected more than 25.7 Lakh people as on April 22, 2020 and the numbers continue to increase day by day. Even though the effect of the virus has been limited in India so far, our already depreciating economy may not remain unaffected. But the Indian residential realty market has another story to tell.

Mumbai property market

The story of Mumbai real estate today is that of a surplus of ready inventory that has very few takers in this market. And the reason is the predominant high prices of homes which the buyers are not able to get around. A survey by the Reserve Bank of India (RBI) indicated that average home-buyers in Mumbai pay around 50 percent of their income as home EMIs taking monthly maintenance into account. As for investment, the percentage is quite low as compared to sales for end-use.

Mumbai market after COVID

Whatever may be the extent of its impact on the economy, a quick recovery is highly improbable. Supply will continue to rise as homes are remaining unsold which means capital will remain blocked. And the consumer sentiment isn't going to be any better soon. Developers would start defaulting on their commitments because of the delay.

The only option for them, however, is to get rid of unsold inventory as soon as possible. A fire-sale with steal deals can be arranged to stimulate demand again. Developers would have to cut down on their margins but in times of crisis, having a steady flow of income is necessary to get the engine started and keep it running. And fortunately for homebuyers, this demotion in Mumbai's real estate prices has been long outstanding.

Something to look forward to

While we continue our fight to contain the virus, there is something that can look forward to after this strict ordeal is over. This is good news, especially for prospective buyers who were looking to book a home right before circumstances turned drastic. If you were looking for luxury residential projects in Mumbai, be sure to check our properties after life resumes. You can be rest assured of the quality and high standards associated with a Runwal home. So a chance for great deals on our luxury flats in Mumbai might be coming your way. But firstly, in these trying times, let's do all that we possibly can to defeat this virus. Stay at home and stay safe!