Market Overview of Residential Property in Mumbai in 2015

1. Market Overview of Residential Property in Mumbai in 2015 Property rates in Mumbai might crash in the near future as the government is making efforts to crackdown on black money in this sector. According to a report by Ambit Capital, a brokerage firm, Mumbai property rates might plunge around 50% in the months to come. As stated in the report, there has been a sharp drop in registration of new residential properties in the city. Even the number of new launches has reduced. Not just Mumbai but property rates in metros as well as small cities across India have dropped between 7 to 18% from April 2014. In the last quarter of 2014-2015, new launches went down by 40- 80%. This is mainly because approximately 30% of real estate development is financed through black money. Since the central government has been making efforts to curb the flow of black money in this sector, investment by high-net worth individuals has slowed down. According to the real estate reports, demand for new residential property in Mumbai has been sluggish and the city will be taking 11 to 14 quarters for clearing the pile up of inventory. Compared to 4-6 quarters required for inventory clean up in a healthy market, this might be a long delay. Home Buyers are delaying their Purchase Due to high rates, many home buyers in Mumbai are delaying their buying decision. Due to this inventory has piled up and many developers have been left with no choice but to reduce rates to start selling. Property Rates Continue to Increase According to a Knight Frank Wealth Report, Mumbai continues to be one of the costliest markets for real estate in the world. Compared to buying a premium property in Dubai, buying a high-end property in Mumbai is costlier. However, in some areas of the city, the average cost of a flat has gone down. According to Liases Foras, a real estate research firm, there are chances of rates reducing further. High rates and over supply are two important factors due to which property rates have gone down in many parts of the city. Where to Invest? If you don’t have the budget to buy a plush home in Andheri, Juhu or Bandra, try exploring the options in Goregaon. Many reputed developers have launched their residential projects in this part of Mumbai, comprising of plush 2 and 3BHK flats. Compared to properties in Bandra-Andheri-Powai, buying a 2 BHK flat in Goregaon is affordable. Developers are launching large township projects and small residential complexes, offering quality housing laced with quality amenities. Other top property investment destinations across Mumbai are Kalyan, Panvel, Dombivli, Sanpada, Ulwe, Kamothe, Mira Road, Kharghar and Nalasopara. Due to the initiation of a number of infrastructure projects in the first half of 2015, sale of properties has increased in Mumbai to some extent. These projects are expected to push investment in different parts of the city. The state government also has plans on developing Mumbai as a gaming and animation industry hub.