The hottest commodity in the Indian economy today is investment property. In Mumbai, property prices are growing at a rapid pace of 30-40% per annum with more foreign companies getting into joint ventures with Indian companies. The demand for commercial space has been boiling. The other factors that contribute to the fire are the retail boom, aged properties being re developed and demand for residential space. India’s retail real estate market is believed to touch a whooping figure of approx USD 450 billion by 2010. Textile mills occupying prime locations in Mumbai are being converted into retail spaces.
Last year, a study conducted by ECA International, an international human resource organisation, declared that India’s financial capital, Mumbai, is the world’s seventh most expensive city, thanks to its ever-increasing property cost. This year, experts predict that the demand for real estate in Mumbai will increase by 30% to 50% from the month of March. This will eventually result in an enormous hike in the property prices in the city.
Development of Bombay Dyeing Mills: One of the largest real development projects in recent times in Mumbai is that Larsen & Tourbo is set to develop around nine million square feet at Bombay Dyeing & Manufacturing Textile Mills, as well as the Spring Mills complexes at Worli and Wadala. All this at a whopping Rs 2, 000 crore. Its going to be a commercial project that would include IT, hospitality space and retail. No residential projects are included.
India’s growing popularity as the latest commercial hotspot is slowly turning out to be a bane for all those seeking land in the financial capital of Mumbai. The ever burgeoning real estate market in Mumbai had been blessedly sluggish for the past few months. Though the property prices never came down, the rate of increase remained low – as low as five per cent in areas of Vashi, Goregaon and Thane. However with more and more premium commercial establishments waiting to be constructed, property rates in the financial capital are expected to rise by about 50 per cent or more.
Mumbai has been a hot property destination for real estate, and continues to be so, attracting big builders and developers not just from India but also from international locations. Mumbai’s real estate has redeveloped many parts of the city, by demolishing old buildings and replacing them with mixed developments of business, shopping and living space.
The city’s real estate prices have out weighed that of Manhattan making it one of the major real estate market of the world. The real estate market of Mumbai has boomed over a few years due to the interest of large Corporate Houses and investors especially from abroad. But the growing number of M.N.Cs along with other industrial sectors and their huge expansion plans has pushed up the demand for office spaces and commercial units. This has also sky rocketed the real estate prices and rents across the city. The office rents of Mumbai are the second highest in the world. By the end of this decade, the requirement of the office units is estimated to increase immensely. The base will continue to shift from south Mumbai to the western and central suburb. The reason being easy accessibility of the land, better infrastructure, proximity to the Airport and major highways as well as affordable prices.
In the residential segment, the increase in per capita income of an average Mumbaikar has motivated him to opt for a better lifestyle . In recent years, there has been a significant boost in the number of the residential projects offering lucrative packages. However, they have not achieved much success in attracting buyers due to the non- affordable prices. This has led to a discord between the buyer and the seller which needs immediate attention.
Mumbai, the financial capital of India, is also the most desirable destination for the real estate investors. With a population close to 19 million people, Mumbai forms one of the biggest urban clusters in the world, second only to Tokyo. The past few years have seen a continued increase in the property values and a drastic increase in the number of commercial properties. Some residential properties in Mumbai fetch the highest rates and two of its commercial properties, namely Nariman Point and Worli were among the top 10 most expensive locations in the world as per a survey conducted in 2007.
Since the 1990’s, the property market in the Indian subcontinent has witnessed a vast change. In the early 90s, people in India, especially those residing in the tinsel town could not even afford to dream of purchasing a property but with the gradual increase of income and the home loans made easy for all, the property market in Mumbai saw a sharp rise.
More on Improvement in Mumbai’s Infrastructure…Spells Boom in Property Market
Budget 2008 has not done much for the real estate sector in India, but the change in income tax rates, mean that there will be more money in the hands of the prospective home buyer. Coupled with this, construction costs are expected to come down on account of reduction in duty and Cenvat. But Housing loan interest rates have not come down meaning that EMIs continue to worry prospective buyers. Will all these translate into a higher demand for housing in Mumbai? The last four years have seen a tremendous price hike in retail housing sector on account of demand far outweighing supply. Out of the 90 lakh homes on sale in Mumbai, only 30% have been built. Prospective home buyers may start scouting for affordable property in surrounding areas like Nasik and Pune. A recently released report on the ‘Housing ‘un’affordability in Mumbai’ by CRISIL underscores the fact that owning a home in Mumbai remains out of reach for more that half the population of Mumbai. While buying a home in Mumbai will remain a dream for the lower middle class, prices for properties in the range of Rs 40 – Rs 50 lakh should see a much needed correction.
So you are lattempting to understand the real estate position in Mumbai, but you are not clear in your mind the market picture of real estate in massive Mumbai?
To help you, here is a preview of real estate market in Mumbai.
The Cotton Exchange building in Jhaveri Bazaar, Mumbai is set to undergo a makeover and emerge as the bejeweled ‘Jewel World’. This is keeping with the emerging trend of specialty malls. The first in the specialty category are the jewelry malls with the latest additions coming up in Mumbai, the commercial capital of the country.
