Industry experts say that the weakness in residential real estate market is there because the consumer confidence post demonetisation is yet to come back. (PTI)

It has been a weak start for Mumbai’s property market in 2017, data on house property registrations showed. During January-March period, there were 14,239 registrations recorded, according to data sourced from Director General of Registrations, Mumbai. This is a over 21% fall compared to January-March period of 2016, and again the lowest in 6 years. FE had reported that the registrations touched a six-year low for two months in a row in November and December last year.

January and February numbers were lower than the levels seen in November and December — immediately after demonetisation. This means that contrary to the expectations that note ban impact would be limited to a short period, it in fact lingered on.

The numbers, however, showed a spike in March. Due to year end rush to register properties and also to avoid paying long term capital gains tax, March numbers are traditionally higher.

Industry experts say that the weakness in residential real estate market is there because the consumer confidence post demonetisation is yet to come back. Ashutosh Limaye, head of research at JLL India told FE that recovery in real estate post any major event like demonetisation is always slow and prolonged.

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For the full year 2016, property sales registrations fell by nearly 4% year-on-year to 65,371, data shows.

Clearly, developers efforts to come up with innovative schemes and discounts also did not cut much ice with the customers which is reflecting in the low property registration numbers in the city. In fact, not only are discounts getting bigger, developers are throwing in freebies hoping to convince buyers.

So much so, that for the first time developers are ready to give even a ‘buy one get one’ free offer to customers.

Demonetisation had a severe impact on the real estate segment with a fall of 40% in residential sales in top eight cities during October-December 2016 compared to July-September 2016, making it the worst performing year since the global financial crisis. Samantak Das, national director (research), Knight Frank India in a recent report observed, “With an extremely dismal performance in Q4 2016, the residential sector continues to strive for stable grounds; and even going forward the residential sector will recover, albeit in a very modest way”.