Indian property developers in the city of Mumbai have announced that they are going to increase their labour rates, following a recent recovery in the stock market, and signs that property investors are starting to return to the market...
However, the industry move has received criticism, as existing demand for property in India remains weak, compared to this time last year, despite the fact that residential prices have fallen by up to 30 per cent since their peak last year.
Many experts project that many developers need to cut their rates by a further 15 per cent rather than raise them.
"It is understandable that Indian developers want to make up for lost revenue during the economic downturn, by hiking up their rates, especially as more global investors are seeking to invest in BRIC (China, India, Russia, and Brazil) nations.
"But many experts project that developers should cut their rates by a further 15 per cent, rather than raise them. Consequently, new-build property prices in the city will also have to be raised inline with construction rates, making property less affordable. This could slowdown any potential cyclical upturn in Mumbai's housing market."
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