The prices of luxury residential homes in Mumbai are expected to decline further in 2019 amidst a severe slump in demand.

A report by property consultant Knight Frank on real estate trends titled “Global Outlook 2019” said that luxury home prices in the city would drop five per cent in the current year.

This is over and above the four to five per cent drop in prices seen in 2018. Industry experts said that the speculative money, which once dominated the city’s luxury home segment, has almost disappeared.

“It happened because of multiple reasons” said Arvind Nandan, executive director research, Knight Frank India Pvt. Ltd.

“A couple of reforms to improve transparency like the Real Estate (Regulation and Development) Act and Benami Property Act have made the play of speculative money difficult” he said.

"Secondly, with short-to-medium term return expectations from real estate remaining subdued, the speculative capital has diversified into other asset classes seeking higher returns."

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