Mumbai Real Estate Is At An All Time High

Mumbai Real Estate Is At An All Time High

The metropolitan city of​ Mumbai is​ seeing a​ high time real estate boom. it​ reflects the​ growing real estate sector of​ India. There is​ a​ considerable increase in​ demand and​ supply and​ an​ appreciation in​ real estate values across micro markets. After Delhi and​ Gurgaon, Mumbai is​ the​ next favourite hub and​ people are moving into the​ city in​ large numbers day in​ and​ day out. Investors and​ HNI’s have been investing in​ various pre-leased properties having insurance, banking, IT/ITES, residential and​ retail sector occupants.

When compared to​ any other real estate market in​ India, Mumbai property sector is​ considered to​ be very transparent. in​ the​ last couple of​ years there has been an​ increase in​ the​ cash component in​ transactions. the​ large demand and​ the​ provision of​ state-of-art flats in​ Mumbai’s most posh locality or​ even in​ the​ outskirts of​ the​ city, has led to​ the​ land prices in​ Mumbai go up considerably. the​ investment market has been thriving with returns increasing manifold over the​ past few years.

The classic example being, an​ investor who invested in​ Peninsula Corporate Park, Lower Parel two years ago at​ Rs 5,000 per sq feet, has enjoyed a​ capital appreciated of​ 50 per cent and​ a​ rental yield of​ 11-12 per cent per annum, translating in​ to​ a​ return of​ over 70 per cent in​ just a​ span of​ two years. Currently, the​ real estate investors are mainly HNI’s and​ the​ good news for​ Mumbaiites will be the​ institutional money which will flow into this sector in​ the​ coming years. the​ coming up of​ malls, huge complex and​ more commercial establishments, there is​ an​ upsurge in​ construction activities in​ most parts of​ the​ city leading to​ investment opportunities in​ commercial and​ retail real estate sectors. Locations such as​ Bandra-Kurla Complex (BKC) and​ Lower Parel have seen increasing demand in​ Grade-A office buildings.

The occupancy levels in​ locations such as​ Andheri East and​ NarimaPoint havealso increased considerably in​ the​ last few months. the​ occupancy rate is​ 90 to​ 95 per cent which is​ quite high. a​ Mumbai Real Estate Developer, Ranjan S, said, “There is​ a​ new trend that has set in​ Mumbai which is​ quite recent. Due to​ high traffic congestions, high cost of​ living many are slowly leaving Mumbai and​ giving away their homes for​ rent. This is​ the​ same case with mall and​ other commercial establishments. Someone invests in​ the​ building not to​ start any establishment but the​ sole purpose of​ buying it​ is​ to​ lend it​ to​ a​ tenant who will pay an​ high amount of​ rent. a​ single-bed room flat in​ Mumbai’s posh area would fetch a​ rent of​ around Rs 12,000 a​ month. Pre-leased properties with high profile tenants are the​ most favoured real estate investment options.”

Just to​ give an​ example of​ how Mumbai remains to​ be one of​ the​ preferred cities and​ its impact on the​ real estate arena, look at​ these statistics. in​ 2003, a​ land in​ Colaba would cost Rs 56, 850 per sq mt while now in​ 2018, the​ price has shot up to​ Rs 62,500. Worli, another high traffic location in​ Mumbai, was priced Rs 43, 850 per sq mt in​ 2003, and​ in​ 2018 the​ rate is​ gone up by Rs 48,250 per sq mt. the​ posh of​ the​ lot, Cuffe Parada/Madam Cama Road, originally costed Rs 72,000 per sq mt in​ 2003 and​ now it​ rates Rs 75, 600.

The recent National Textile Mills (NTC) transactions in​ Central Mumbai have greatly altered the​ face of​ the​ land of​ Mumbai transactions. Meanwhile, the​ 17th Cotover Bombay High court ruling scuppered the​ NTC mill land sales. Here, 5 mills were sold to​ private developers, totaling over Rs 202 million), as​ it​ held the​ sale of​ surplus mill land contrary to​ the​ Supreme Courts earlier order.

But all said and​ done, if​ the​ current interest rates remain constant, the​ yields from commercial properties are expected to​ decrease to​ around 9 per cent from the​ current 10.5 per cent but if​ the​ interest rates go up then the​ yields will be around 10 to​ 12 per cent.

Mumbai Land prices are all set to​ increase by a​ good 5 to​ 10 per cent according to​ the​ annual ready report issued by the​ inspector general for​ stamp duty and​ registration. He said that the​ prices in​ south and​ central Mumbai are expected to​ go up while those for​ office space will remain at​ its current level. Secondary business districts like Worli and​ Lower Parel are set to​ move Northward.

Undoubtedly, even the​ residential prices have gone up considerably. the​ demand for​ 3BRK apartments, which falls under the​ high end category, has increased owing to​ factors like high deplorable income, double income facilities and​ overall greater affordability. the​ demand for​ residential property will be high provided the​ interest rate on housing finance is​ reasonably low and​ the​ economy is​ stable. in​ Mumbai, on a​ average, capital values have shown a​ rise of​ 15 to​ 20 per cent over the​ last one year.

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Mumbai Real Estate Is At An All Time High

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