Mumbai Apartment Rates

[Rajiv]

This is just unreal and just plin crazy http://timesofindia.indiatimes.com/City/Mumbai/1-BHK-flat-in-Mumbai-sold-for-Rs-45-cr-/articleshow/6076922.cms This is like 3 blocks from my old place in Mumbai - 2001, price was 90 lakhs to 1 crore for a 2 bedroom, 9 years down - 1 BHK goes for 4.5 crore?? ( 700 sq. feet ) Subarban Mumbai, not even South Mumbai This is a freaking 30 year old building, the new towers will fetch the builders a lot, but with sale, u make 30-40 residents a millionaire overnight kya baat hain yaar

[b555]

http://beta.profit.ndtv.com/news/show/mumbai-suburbs-may-get-costlier-post-hc-judgement-on-fsi-73108 Mumbai suburbs may get costlier post HC judgement on FSI‎

[punjabi_khota]

Some of the Mumbai and Delhi real estate is costlier than Manhattan and London prime location estate...

[Holysmoke]

yeah.. but the thing is.. prices in the suburbs are gonna get even more expensive... south mumbai will get cheaper coz ultimately there are only a small amount of ppl who can pay 10-15 crores for a flat.. There is a new building coming up on nepean sea road that's charging 100 crores per flat.. lol... But there is a lot of development going on just beyong worli.. lower parel has this major DLF thingy coming and lodha is gonna build tallest residential building there etc. those are gonna be 7-8 crores per flat. flats in south mumbai are going for upto 90,000 per sq.ft. (good bldngs with sufficient parking etc) Ultimately supply is going to catch up with demand and prices will fall. BUTTT.. in the suburbs.. places like jogeshwari, thane, navi mumbai etc prices are low right now and are going to go up soon. OBV there are some places like the oberoi builders thing near fantasyland which are charging high there too.. imagine paying more than a crore for a 1 bedroom in fkin jogeshwari:blink:

[Holysmoke]

there are flats for 7-8 crore in thane as well :hehe: bloody awesome houses, with private sun deck and private pool and garden and all..(full entourage style) but who the f wants to pay so much and live in thane :headshake:

[b555]

there are flats for 7-8 crore in thane as well :hehe: bloody awesome houses, with private sun deck and private pool and garden and all..(full entourage style) but who the f wants to pay so much and live in thane :headshake:

[kabira]

The real estate market is for some reason going up everywhere. Its Greed that is taking over. And our government was planning to tax 10% on the property value, Imagine that. We bought a flat here for 13 Lakhs and in less than a month its 17 Lakhs.

[Ram]

This is insane in every which way you look at it. First of all, I cannot possibly think of a reason why someone who can shell out 5-6 crores for a house would ever want to live in a 1 BHK apartment, that doesn’t make sense at all. So, the only other obvious reason one can think of is that they’re looking at it as investment option. This is now becoming one of the most dangerous trends in India. More and more people, who are already home-owners continue to buy up property and real-estate, thus jacking up the prices for others. The trend is particularly common among the higher-middle income bracket, families that mainly feed off NRI and IT money. Where will this end? You don’t even need to be an economic expert to understand that it can end only in one way – BADLY. There’s just too much growth, too fast and majority of it is simply driven by greed and speculation. These days, the housing market demand is not mainly because of more/better houses, but because rich people want to to invest their money. The government has to step in and regulate this sector before its too late, because right now, the poor and the lower-income group families are simply being driven to desperation. The only saving grace is, unlike the US housing market crash of 2008-09, the Indian buying spree is probably not ENTIRELY funded by credit or bad loans, nor does Indian consumer have a habit of borrowing against their home equity. As far as I can tell, the only this can slow down is if there’s a significant recession and jobs slump for about 18-24 months, especially in the IT sector. If that happens, a lot of families who borrowed heavily to fund their home purchase may struggle to pay their mortgage. That will slow down home-sales significantly, even though it may not stop it. The govt. should also tighten regulations against NRI money being funneled into real-estate.

[kabira]

^very well said. I see big crash in indian real estate sooner than later.

[Lurker]

The trend is particularly common among the higher-middle income bracket, families that mainly feed off NRI and IT money.

Been saying this for a long while now. IT and NRIs would freaking kill the Indian real estate market with their greed.

The only saving grace is, unlike the US housing market crash of 2008-09, the Indian buying spree is probably not ENTIRELY funded by credit or bad loans, nor does Indian consumer have a habit of borrowing against their home equity.

One way to look at it sure. A different way is to understand that Indian mindset works differently. Indians when buying a house put a lot of money upfront(cash down) and many a times this comes from the family, parents etc etc. Most people I know bought house with about 15-20% down. In USA people bought homes with 0 down, or 3% down and rest was financed. When markets tanked they lost their houses, but not so much their savings. Sure their credit took a hit but they had money for bad times. In India if market tanks people would lose their and their family's savings in one swoop. It could potentially be even worse than USA. xxx

[Ram]

This is very much like the Dotcom burst ten years ago. Much like how most of the multi-million dollar valued companies were actually worth next to nothing, there’s no way a 700 sq ft in suburban Mumbai is worth a million bucks. People who are buying up these properties are just plain suckers who have succumbed to their own greed.

[Clarke]

We freakin need more cities. Economic growth does not have to begin and end in the metros.

Been saying this for a long while now. IT and NRIs would freaking kill the Indian real estate market with their greed.

You say this often; do you have any numbers on the percentage of the expensive real estate that is purchased by NRIs ? I dont doubt ur knowledge or anything but would like to see some stats for once. Lets not forget, we produce some of the fastest millionaire ($$) growth figures worldwide and i get a feeling a large portion of this bubble is domestically created.

[Lurker]

We freakin need more cities. Economic growth does not have to begin and end in the metros.

Cities are not the answer, although it will help. We need industries that are not clustered in certain areas. Places like UP, for example, are massively populated but they also have industries that can be utilized to bring in vibrant migrant population. Tourism would be a good example.

You say this often; do you have any numbers on the percentage of the expensive real estate that is purchased by NRIs ? I dont doubt ur knowledge or anything but would like to see some stats for once. Lets not forget, we produce some of the fastest millionaire ($$) growth figures worldwide and i get a feeling a large portion of this bubble is domestically created.

The data would have to come from Planning Commission or Human Resource group. It is a Socia-Economic situation and I am hardly an Authority on that one. Still it you look around and check with your NRI friends you should be apt placed to see how many of them have a property back home or not. And aside from anecdotal knowledge I would be very interested in learning which Indian job, apart from IT and possibly Multi National companies, pay so much that housing in an average cosmopolitan town in India today is about 1 crore? xxx

[Clarke]

The data would have to come from Planning Commission or Human Resource group. It is a Socia-Economic situation and I am hardly an Authority on that one. Still it you look around and check with your NRI friends you should be apt placed to see how many of them have a property back home or not.

In terms of the number of NRIs who spent a crore or more on property in India ? Not many, and comparable to the number of near and far relatives i have seen buy property in Lokhandwala area itself, rest of Mumbai or India is another story. But that's just me and the overall trend might be different.

And aside from anecdotal knowledge I would be very interested in learning which Indian job, apart from IT and possibly Multi National companies, pay so much that housing in an average cosmopolitan town in India today is about 1 crore? xxx

To be frank, its not often the salaried class but the business community that makes crores per yr and spends that sort of capital on property. I have seen many stores (not excessively flashy but well managed and functional) in Mumbai sell inventory worth lakhs of rupees every single day. Thats just the retailer, the various middlemen have their fair share of profit and so do the manufacturers as well as the importers/exporters. Does it surprise you that despite the unbelievable rise in food prices, thousands of farmers are committing suicide ? There certainly are middlemen and black marketers that have made their lakhs and crores off agriculture as well. I do not intend to list the problems the farmers face here but am pointing out how money is made from every sector. Add to that the fact that the IT departments can be inefficient, understaffed and unbelievably corrupt, the end result being u have a lot of very rich people per square mile in some areas of every major city. You may have been used to receiving the monthly salary after deductions but that is not how all of India works. Around 90-95% of labor in India is unorganized i.e. no written contracts, no regulations, no benefits, nothing. Who's profiting from all this ? Its some of our own countrymen.

[Desi Cartman]

A lot of back money is invested in properties. As someone of sound mind told me years ago " dont fall for the trap that property prices always go up, they do come down and when they do then they dont go up quickly" I also read a study about % of salary as mortage, it said that mostly since 1950's that percentage has been under 15% ( mostly around 10%) before the burst in the US some people were paying as much as 30% of their salaries in mortgage and its not sustainable. In Aus a typical household earns around 60k ie 5k a month and an average house in outer melbourne costs 350k ( $2300 a month ) and the suburbs which were considered far away till 10 years ago , a house costs over 5-600k. In Aus we didnt have recession nor did we have much ( if at all ) drop in prices. Now tell me how is this sustainable when average salary is 5k ? Now to India , an apartment which a relative of mine bought for Rs 2.5mill 5-6 years ago is worth around 7 Million today... but the rent from the property is under 10k ? so whats the return on investment and how can someone sustain to make repayments unless they have black money or inherited money ? This is where a lot of businessmen in India are investing as they are imagining that by this rate their properties will be worth gazaallion rs in 20 years.

[jusarrived]

Clarke is spot on , IT or NRI money is not big enough to make an impact on real estate markets ...this section is almost non-existent in Mumbai , still the prices here have spiked more than any other city . There is more money in this city than u can imagine , especially with the business guys . I have a cousin doing business in excess of 10crs & his store is not more than 200sqft , the area is dingy as well . Apparently hes only a small time retailer in that area . can you imagine the kind of money the big guys must be making ? surely not looking at their stores/setup & from what i have seen the business guys dont go for relatively dead investments unless they have surplus cash & it is this surplus cash which is being pumped into stock & real estate markets. Not necessarily the bubble some of you are making it out to be .

[Holysmoke]

To be frank, its not often the salaried class but the business community that makes crores per yr and spends that sort of capital on property. I have seen many stores (not excessively flashy but well managed and functional) in Mumbai sell inventory worth lakhs of rupees every single day. Thats just the retailer, the various middlemen have their fair share of profit and so do the manufacturers as well as the importers/exporters. Does it surprise you that despite the unbelievable rise in food prices, thousands of farmers are committing suicide ? There certainly are middlemen and black marketers that have made their lakhs and crores off agriculture as well. I do not intend to list the problems the farmers face here but am pointing out how money is made from every sector.

Clarke is spot on , IT or NRI money is not big enough to make an impact on real estate markets ...this section is almost non-existent in Mumbai , still the prices here have spiked more than any other city . There is more money in this city than u can imagine , especially with the business guys . I have a cousin doing business in excess of 10crs & his store is not more than 200sqft , the area is dingy as well . Apparently hes only a small time retailer in that area . can you imagine the kind of money the big guys must be making ? surely not looking at their stores/setup & from what i have seen the business guys dont go for relatively dead investments unless they have surplus cash & it is this surplus cash which is being pumped into stock & real estate markets. Not necessarily the bubble some of you are making it out to be .

Absolutely. The paan-waala next to my house has a 3 bedroom flat in worli (no joke). IT money in Mumbai is "thenga". NRI money will be there, but I would go as far as to say that it would be more concentrated towards the middle class. Most of the NRI money would be going to smaller cities like Ahmedabad, Pune, etc. Think of it, if someone is staying in south mumbai, he probably doesnt need money from abroad. Guys, the thing with south Mumbai is.. there is just no more space for development. So every single piece of land in south mumbai is EXPENSIVE. On the other hand, you can get a bungalow in santacruz east (kalina) for less than 5 crore. (8 crore if you want a big one). There ARE places in the suburbs that the middle class can afford. On the other hand, there are places in the suburbs that are just :blink: expensive Up until now, all the development in mumbai was done on the western suburbs. If you look at the map of mumbai, you will see that mostly all the development was along the western line.. all the way to borivali/bhayender. But now, a lot of development is happening along the eastern and central lines. Vashi and the surrounding areas have already developed well. If you see how the metro and the monorail are coming up, it is connecting east-west. So these are the places to invest. South Mumbai prices will go down, but I dont think they will tank. All the development in parel, mahalakshmi etc will help alleviate the demand somewhat, in the sense that they will entice people to move out of south mumbai. The biggest problem is infrastructure. How the hell is it gonna be sustained? The govt has already said that no water for new buildings upto 2012. :blink: If you see the new buildings, they proudly say that we will provide mineral water 24/7 from the tap. WTF is going on?:nervous: What about the roads? more and more people are getting their own vehicles because the public transport sucks. How are we going to accommodate so many nanos?

[Lurker]

To be frank, its not often the salaried class but the business community that makes crores per yr and spends that sort of capital on property. I have seen many stores (not excessively flashy but well managed and functional) in Mumbai sell inventory worth lakhs of rupees every single day. Thats just the retailer, the various middlemen have their fair share of profit and so do the manufacturers as well as the importers/exporters. Does it surprise you that despite the unbelievable rise in food prices, thousands of farmers are committing suicide ? There certainly are middlemen and black marketers that have made their lakhs and crores off agriculture as well. I do not intend to list the problems the farmers face here but am pointing out how money is made from every sector.

Bombay real estate market is very different to the rest of the country really. Just the nature of the city means it is essentially a city built on trade and commerce and not so much on human capital. So it is not surprising that trader class ends up gobbling much of the real estate. You will always have peculiarity like that based on a city's character. Delhi, for example, would have lot more properties bought by politicians than any other Indian city. However if you start to look around cities that are devoid of any such character, and in general are built on working class, a la Pune, Bangalore, Chandigarh etc etc you will start seeing the influence of NRIs, IT and ITEs.

[Ram]

Clarke is right, probably a big proportion of the demand for real-estate is home-grown and also not from families working in IT. But what we shouldn’t forget is that we’ve had entreprenarial businessmen in our cities always. Its not like successful small-business owners are a recent phenomenon, it has been happening all the time. The only difference is, all the new growth fueled by the barrage of high-paying tech jobs has meant that the successful small business owner who used to make 25 lakhs a year is now making a 1 crore. So, its all really inter-related. NRI money probably contributes only a fraction of the overall real-estate demand, but lets not forget, in the cycle of supply-demand economics, all it takes is only a fraction to tilt the entire balance. Obviously, it would be too simplistic to pin the blame for the recent explosion in the real-estate market on the IT guys and money from NRIs. But they definitely have played a significant role in creating this mess. I dunno what the govt. plans to do to tame this monster, but they better do something. One way is to increase the interest rate and slow down borrowing, but that might slow down the entire economy. The other way is probably to hike property taxes and incease capital gains taxes on buying/selling of property and make it less appealing for consumers to buy/sell homes as a means of investment, but that might slow down jobs in the overall construction market and that cannot be a good thing. Maybe they should try the method suggested by other members here and aggressively puruse the growth and development of satellite cities. They could shift all their governamental and legislative buildings/offices to that new city, build state-of-the art rail and road links as well, encouraging people to move there. They can also create special economic zones and give tax breaks to encourage private organizations to start their businesses there. That way, not only do we ease the pressure on the existing real-estate market, we also have the chance to create an entire, well-planned city with world class infrastructure from ground-up. But one thing’s for sure, this kind of growth is simply not sustainable and if unchecked, it’s a only a matter people before all home-owners get up one day and find that their property values have plummeted by a third.

[Holysmoke]

The other way is probably to hike property taxes and incease capital gains taxes on buying/selling of property and make it less appealing for consumers to buy/sell homes as a means of investment' date=' but that might slow down jobs in the overall construction market and that cannot be a good thing.[/quote'] That just reminds me. The current law is such that if you make money through capital gain, you can invest it in property within some specific period of time and not have to pay tax on it. I know quite a few people who have invested capital gain in property to save on the tax...