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Futher Increase in Real Estate Price Expected in Mumbai

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Futher Increase in Real Estate Price Expected in Mumbai

Last updated: December 19 2012
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  • Futher Increase in Real Estate Price Expected in Mumbai

    As per the report below prices have increased by average 10% .
    We at groffor keep a track of pricing of different projects across Mumbai to keep buyers up to date on the prices so that it helps in the decision making process.
    Though our buyer survey showed that buyers are expecting a 20% discount on prices, we note that builders have taken a completely different highway “their way”— prices in Mumbai have been raised by an average 10% in the period Jan – March 2012.


    We have considered pricing of 55 projects across Mumbai to arrive at this conclusion. In fact, there were 8 projects where pricing has moved by greater than 20%.





    Which areas, which projects and how much have prices increased? Which builders are raising prices?I see that there would be further increase in prices due to following reasons

    a) Rise in input cost steel , cement , sand and labour will further increase
    b) MMRDA rental housing scheme which consititute bulk of the projects (accounts for about 70% of total flats launched in 2009) is stuck so the supply of ready possession flats in the market is very low and is likely to remain the same for 1 to 2 years.
    c) Govt. has differed auction of land or have increased the reserve prices significantly...MMRDA and Cidco the two prime authority owning the land have differed the land auction and CIDCO increased its reserve price in the recent land auction.
    d) Indian industry is expecting on an average 10% increase in salary.. which would futher increase affordablity
    e) There is lots of pent up demand due to people differing their sales on anticipation of cut in real estate prices .... but the reverse has happened ... prices have increased
    f) There are significant challenges in getting govt approval for the projects ... both new and underconstruction. Hence , the supply has been further restricted . Ask any builder in your locality and he will mention the challenges he is facing .... hence so many underconstruction building are stuck.

    Until unless the supply in market increases the prices are going to rise further 15% by March 2013. Genuine end users can buy ... for investors ... it would be his/her own choice based on individual research
    Last edited April 27 2012, 11:11 AM.
  • #2

    #2

    Re : Futher Increase in Real Estate Price Expected in Mumbai

    Haha i dont care, I sold my flat at the age of 30 and I retired ever since ..
    I am so happy i dnt have to work any more and I am laughing at all those who buy at this nonsensical pricess.. ROFLMAO

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    • #3

      #3

      Re : Futher Increase in Real Estate Price Expected in Mumbai

      Originally posted by ajayanari View Post
      Haha i dont care, I sold my flat at the age of 30 and I retired ever since ..
      I am so happy i dnt have to work any more and I am laughing at all those who buy at this nonsensical pricess.. ROFLMAO
      So where do u live now?

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      • #4

        #4

        Re : Futher Increase in Real Estate Price Expected in Mumbai

        Originally posted by amitmk View Post
        So where do u live now?
        It seems to be MLA Hostel!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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        • #5

          #5

          Re : Futher Increase in Real Estate Price Expected in Mumbai

          Homes become more affordable in last 10 years

          MUMBAI: Real estate prices in metros such as Mumbai may be at a record high. But, on an average, homes across the country are more affordable than they were five or even ten years ago.

          According to an analysis of HDFC data, the average cost of a house purchased by its borrowers was Rs 12 lakh in the year 2002. Over the years, the average amount paid for a house (by HDFC borrowers) rose to Rs 40 lakh in 2011.

          But salaries have risen faster. The same period saw the average borrower's salary rise from Rs 2.45 lakh to Rs 8.3 lakh. As a result, affordability - measured by the home price as a multiple of annual salary - has improved .

          The borrower, who on an average needed 5.1 times his annual salary to buy a house in 2002, needed only 4.8 times his annual salary in 2011.

          The affordability figure is a national average and over the years HDFC's borrower profile has also changed with more loans being disbursed in smaller cities. However, the long-term trend in affordability holds true for most cities because of high levels of income growth in the first decade of the 21century. The country's per capita income has tripled from Rs 19,040 in 2002-03 to Rs 53,331 in 2010-11 .

          The increase in affordability would mean that housing and housing loans will continue to grow in coming years. Considering that there is a housing shortage of 26 million housing units according to Jones Lang Lasalle, the potential will last for some time.
          If affordability has improved for home purchase, it is has jumped for rentals. "Around 2001-02, a one-bedroom apartment in Andheri costing Rs 22 lakh would fetch a rent of Rs 8,000 to Rs 9,000. Today, the market value of the same apartment is over Rs 1 crore, but the rental income is at best Rs 25,000. Rentals have not kept pace with house prices," says Deepak Mehta, a Mumbai-based real estate broker who specializes in the suburb of Andheri.

          Incidentally, the golden period for buying property was the year 2004 when, on an average, the HDFC borrower paid the equivalent of 4.3 years of his prevailing salary for buying a house. It was at this time that borrowers got full benefit of tax breaks because of larger loans and interest rates started dropping.

          Internationally, rentals up to 25% of income are considered affordable. However, this would vary depending on how much of the income is left over after providing for basic necessities.

          "Monthly rentals in Mumbai are in the range of 22 to 25 basis points of the property value," says Mehta. According to real estate developers, one of the reasons for high prices in Mumbai is the freeze on supply. According to Vyomesh Shah, MD, Hubtown, high prices in Mumbai are largely because of the constraints on supply.

          "Today, even in a city like Ahmedabad, there are projects where you can get apartments where the rate per square foot is around Rs 2,500" says Shah.

          Homes become more affordable in last 10 years - The Economic Times

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          • #6

            #6

            Re : Futher Increase in Real Estate Price Expected in Mumbai

            I had opened a separate thread, but as per this report Mumbai is scoring very high on the renting v/s buy index which means it is better to rent than to buy in Mumbai
            Attached Files

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            • #7

              #7

              Re : Futher Increase in Real Estate Price Expected in Mumbai

              Property prices up 3.2% in three months, says report

              There is bad news for prospective home buyers who have been waiting for a price correction to take place to book their dream homes.
              A report released by Jones Lang LaSalle (JLL), a global leading real estate services firm, noted that residential rates in the city have once again begun to grow steadily after a prolonged phase of stagnation.
              The report said that property prices in Mumbai have gone up by 3.2 per cent in the last three months. This is the highest quarterly rise seen since January 2011 when quarter on quarter rates had increased by a mere 0.8 per cent continuing its sluggish growth over the next three quarters.
              The report predicts that prices are likely to go up further. Figures show that unlike the one-year period since July 2008 when property prices in Mumbai had shown negative growth in the wake of the slowdown, this time around prices would increase, but not in a meteoric manner.
              “There has been a nine-month waiting period during which consumers expected a price correction to take place. However, builders were able to generate cash flows by selling one or two units at discounted rates through across-the-table negotiations and then they continued sitting on to their price points,” said Ashutosh Limaye, explaining why Mumbai never saw an across the board price correction despite the sales velocity being on the wane.
              He added that not only have prices increased, but absorption rates too have picked up between January and March this year.
              There is bad news for prospective home buyers who have been waiting for a price correction to take place to book their dream homes.
              A report released by Jones Lang LaSalle (JLL), a global leading real estate services firm, noted that residential rates in the city have once again begun to grow steadily after a prolonged phase of stagnation.
              The report said that property prices in Mumbai have gone up by 3.2 per cent in the last three months. This is the highest quarterly rise seen since January 2011 when quarter on quarter rates had increased by a mere 0.8 per cent continuing its sluggish growth over the next three quarters.
              The report predicts that prices are likely to go up further. Figures show that unlike the one-year period since July 2008 when property prices in Mumbai had shown negative growth in the wake of the slowdown, this time around prices would increase, but not in a meteoric manner.
              “There has been a nine-month waiting period during which consumers expected a price correction to take place. However, builders were able to generate cash flows by selling one or two units at discounted rates through across-the-table negotiations and then they continued sitting on to their price points,” said Ashutosh Limaye, explaining why Mumbai never saw an across the board price correction despite the sales velocity being on the wane.
              He added that not only have prices increased, but absorption rates too have picked up between January and March this year.
              Property prices up 3.2% in three months, says report - Indian Express

              The take away : The shortage of units available with all the permisions and demand has led to the above increase

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              • #8

                #8

                Re : Futher Increase in Real Estate Price Expected in Mumbai

                Oh man this is a very bad news. Now I have given up my mind on buying at these rates

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                • #9

                  #9

                  Re : Futher Increase in Real Estate Price Expected in Mumbai

                  Why r u making people fool ?

                  who told u that RE prices will increase ? how much u r paid by builder lobby ?
                  Friends.. dont go by this agent ...
                  dont be hurry .
                  prices came down 10% this month . atleast 30% fall from now is expected in Mumbai ..
                  for sure .............

                  Comment

                  • #10

                    #10

                    Re : Futher Increase in Real Estate Price Expected in Mumbai

                    Be Specific

                    Originally posted by Manoj99 View Post
                    who told u that RE prices will increase ? how much u r paid by builder lobby ?
                    Friends.. dont go by this agent ...
                    dont be hurry .
                    prices came down 10% this month . atleast 30% fall from now is expected in Mumbai ..
                    for sure .............

                    My friend, be specific and list examples (like others did) to prove your point. Otherwise, it looks like nothing more than beating around the bush to promote wishful thinking. All of us will benefit if can provide information on specific projects around Mumbai from various builders, where this price reduction has been happening and is constant as you claim. I wish your words are true!

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