Where Does the Realty Of Mumbai Stand Currently?by Anurag Gupta Real Estate Consultant The city of dreams neither sleeps, nor does its realty market. Known to be the most volatile real estate market, the property market of Mumbai has witnessed over 300% appreciation in the last 7 years. Today, the apartments that used to cost around 2 crores in the year 2008 are being sold at the price of more than 7 crores.
On the contrary, the soaring prices of the property in Mumbai had brought the realty market to the standstill. If we look at the average annual household income of a Mumbaikar, it is only approx. Rs. 7.5 lakh, while most of the houses that are available for sale are priced at over Rs 1 Crore and above. The growing demand for the affordable housing within a decent range is leading to the creation of a huge inventory that belongs to the luxury segment.
The real estate investors were very hopeful since the beginning of the year 2017; however the year disappointed everyone, and now the city stands still with an unsold inventory of 77,000 apartments, which will take about 12-14 quarters and a whole lot of efforts to clear it off. Out of the total inventory that’s available, 3.5% is ready for possession while 70% of the same belongs to the price group of 1 crore and above.
Demand But No Supply
It is the affordable housing segment that’s driving the maximum traffic in the mega city, i.e. the houses that are priced either below Rs 30 Lakhs or within the price range of Rs 30 Lakh to Rs 65 Lakh. As per the current records, there are no projects in the laying inventory that are priced under Rs 30, whereas just a few projects are available within the range of Rs 30-65 Lakh.
The current picture demands a reduction in the prices of the property, but the developers are reluctant to do so as the cost of construction, financial liabilities, and interest rates have remained the same or even risen.
The Hazy Government Verdicts
After the failure of the development plan 2034, the government promised to draft a new development plan in the coming 3-4 months. The plan is still pending in the legislature for the approval. Due to the emerged uncertainty, the realty developers are refraining from even investing a penny in Mumbai’s real estate for a while, whereas dilapidated buildings that signed redevelopment contracts are still standing untouched.
What Future Holds
The realty market of Mumbai has witnessed a slowdown in the past one year; however with the developers keen to reduce their inventory level, and banks planning to lower down the interest rates, there is a lot to look forward to. By the end of the Q2 of 2018, realty marketers are expecting an upward trajectory in the Mumbai’s realty market.
The above-mentioned points reflect the current state of the Mumbai’s real estate. Though the realty market of the city has experienced a slowdown in the past, but the markets are expecting the same boom by the end of the year 2018.
Created on Feb 5th 2019 01:17. Viewed 681 times.
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