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- Mumbai property prices may not see major appreciation in 2007
With real estate prices already sky-high in Mumbai, most market watchers do not see major appreciation likely to happen in 2007 in the residential market. On the contrary, they see a lot of policy decisions ahead that could improve the supply of housing stock in the next few years and help keep prices in check.
Over the last one year, the premium segment has grown between 40-70%, and the lower segment by 20-45%.
Prime residential districts of South Mumbai, Worli and Bandra are unlikely to see much appreciation. There is still growth left in newer suburbs, particularly where significant infrastructure is being built. For example the proposed airport and railway terminal could drive up prices near Panvel, Uran-Alibag will benefit from the proposed Nhava-Sheva bridge, while Thane could benefit from its proximity to major new commercial/office space developments.
Observers believe that the government will initiate policy measures to drive up supply of housing units and keep real estate prices in Mumbai in check. These measures include repealing the Urban Land Ceiling Act, doing away with the Rent Act, increasing FSI, opening out the eastern waterfront to development and moving on slum rehabilitation schemes. Such moves would not only release large tracts of land for new developments, but also release the locked-up housing stock in the city.
End-users are likely to see some relief as the supply situation eases in the next two years and prices stabilise or ease. Investors may find richer pickings elsewhere.
Can these policies bring any reformation in aamchi mumbai's infrastructure?CommentQuote0Flag
- Mumbai: Be “real”istic!
Don't know about the policies but property rates in Mumbai are really making tahlaka .........
Realty basks in speculation, and Mumbai has always been a top story when it comes to matters of real estate. Enjoying the status of being the country’s financial and business capital, Mumbai’s property market has very naturally been influenced by the country’s economic health.
As prices of real estate in cities like New Delhi-NCR Chennai, Kolkata and Bangalore strode upwards, Mumbai quietly watched in the first half of 2006, but in recent months there has been a sharp increase, with several stories again doing the rounds.
Foreign funds, demand from the retail sector, speculation – none of these can explain the sudden rise. Mumbai suffers from a persistent shortage of homes, as more families go nuclear or upgrade to larger apartments. This appears to be the only reason for this rate hike. But to touch figures of Rs.60, 000 per sq. ft in premium localities, and Rs. 20,000 in the middle-rung category – well, that’s crossing all realistic limits!
Industry and the city’s residents can hardly afford a bubble – if that is what speculation is bringing about. The Government needs to move in, by exercising controls on banks, and curtailing their lending. Experts are hoping for some price correction in property prices in 2007.CommentQuote0Flag
- Dear All,
I feel Mumbai realty prices is a function of i) Economic boom, ii) Stock Market performance,iii) Skewed supply and demand situatution due to various Acts and iv) the speculative interest of the Real Estate Agents. This is not to undermine the fact that demand side will always remain as pointed out in the article from the end users (upgrading segment) and not to forget a large segment of migrants (again endusers).
Given the matrix above, some variables would always balance out the other and thus may always tend to give price stability.
Easing out of prices can only happen in strong recessionary situation, a lage thrust to supply in terms of Govt enactments and the proposed Reverse Mortgage that is to be kicked off soon.
Till then we really need to swear it out on property buying!!!CommentQuote0Flag