METRO ESTATE
Mumbai
How Low is Low
Prices stay steep, but with room for
play.As with stocks,
the real estate market rose on the basis of the "greater fool theory" which
states that each buyer in the chain expects a greater fool to buy the asset from him at an
even higher rate. Then, the last fool trips up. By that yardstick, Mumbai's property
market has been the worst hit amongst all the cities in the country with nearly 50 per
cent decline in the prices of residential apartments in the last two years.
| Malabar Hills |
Worli |
Bandra (West) |
Andheri (West) |
Borivili
(West) |
But a common complaint has been that the
prices are still beyond the reach of even the majority of the upper-income group, let
alone the middle class. The reason is that the decline in the prices has been for the
apartments under construction or those close to completion. The rates for the prime
apartments in south Mumbai are still quite high.
In both cases, the prices are not expected to witness any
further substantial decline over the next 12-15 month period. The developers cannot reduce
the rates any further as the financing costs of the project have increased substantially
due to delay in the project sales. But there's a new willingness of the developers to
customise; first develop the shell of the building and later finish it based on the
individual buyer's design needs.
Expect to see CEOs about if you're in the suburbs. The
shifting of the offices from the south to the suburbs has led to a substantial change in
the character of the suburbs. Bandra which was earlier not considered the prime area for
CEOs has now attracted CEOs also due to its proximity to new office areas such as
Bandra-Kurla and Andheri-Kurla Road. This has led to a holding of price besides a moderate
appreciation in the prices in some areas.
The attraction of the suburbs is only expected to increase
in the coming months, for another reason. Taking advantage of the reduced prices, many
households are disposing of their existing apartments "in town" -- still worth a
packet but poky and crowded -- to shift to more open, less-crowded areas in the suburbs,
buying larger-sized flats in the bargain.
An exclusive series from CB Richard Ellis |
