India’s commercial capital is expected to witness a fall in property prices in the next 2 years. As per Prime Global Residential Forecast, a research report released by Knight Frank, the prime residential market of Mumbai is likely to see a price fall of 5 per cent in the year 2020.
Additionally, for the year 2021, Mumbai’s prime residential market is expected to witness a further price decline of 3 per cent. The Knight Frank analysed 20 cities globally to ascertain price movement in these cities in 2020 and 2021 based on projections for demand and supply.
It also analyzed the impact of COVID-19 in the different markets and the varying government stimulus measures announced. The impact of the crisis on the economy is yet to be fully estimated, given that most countries are still struggling to recover from the COVID-19 pandemic.
The Knight Frank has not placed an exact figure on the forecasts, but analyzed 20 cities into four categories: markets that will see strong price growth (+5% or more); those that will see low price growth (0% to 5%); those that will witness flat or low price falls (0% to -5%); and those expected to have strong price falls (-5% or more).
Only four of the 20 analyzed cities are expected to see price growth throughout the remainder of 2020. Talking about the findings of the research report, Shishir Baijal, chairman and managing director, Knight Frank India said, “the impact of Covid-19 is far reaching for most global markets which is reflected in the outlook for the prime residential segments. India’s key markets will also be faced with the uncertainty, mostly due to a significant erosion of confidence among buyers across spectrum.”
“However, this also presents a ray of hope for serious buyers with adequate liquidity to enter the real estate segment in India and across the world as values would be attractive,” he added.
Talking about changing the trend of home buying, Knight Frank also predicted that COVID-19 may bring about a change in priorities related to buying a second home, financing of a home, the rental market, and so on. The property will, however, retain its appeal as a long-term investment and store of capital, the company said.