Skyrocketing Property Prices In The City Of Dreams

Mumbai is a city of dreams that brings many people to its shores. But over the years due to rise in demand of real estate in Mumbai the prices of property in Mumbai have reached a new high. Buying flats in Mumbai, these days, has remained the sole privilege for the very affluent class, especially in the Western Sururb of the dream city. In areas like Powai, Andheri, Jogeshwari and Goregaon an unfurnished, 650 ft., 1 BHK flat can cost you anywhere between 60 lacs and 1 crore!! The prices in real estate in Mumbai has swelled too much that it can burst any time now. Areas such as Thane and Navi Mumbai that were supposed to offer the affordable housing to middle and lower-middle segments, who could afford to buy property in Mumbai, are ranking high in terms of price rates. What could be the reason behind such a catastrophic rise in rates?

The inflation that hit the Indian market recently resulted in an appreciable increase in the cost of construction materials like sand, cement, steel etc. To compensate for their invested money on these, developers started raising the rates. But they were not fair in doing so: they let the prices get appreciated too much, so much so, that the Mumbai flats gained a considerable raise in terms of prices. The greed of developers and builders, along with their nexus with political authority gave them ample freedom to appreciate the prices too much.

Seeing the hefty rates, the demand for real estate and flats in Mumbai came to an all-time low. Even the middle and upper-middle income groups started wavering from their decision to buy. In spite of the fact that the demand dwindled, the developers did not lessened the rates. Instead, to bring back the customers, they came up with offers like freebies and small discounts. But this strategy of theirs has not brought any fruitful result. As long as the prices do not get corrected, it would be difficult to see the demand get any increase.

Mumbai property developers see smaller homes as good investment options

Makaan.com

It will not be wrong to say that Mumbai is the most expensive city in India. Purchasing and renting properties in Mumbai seems to be distant dream as the prices keep surging every year. Compared to other cities, the home prices in Mumbai have appreciated by an average 66%, a report says. Because of the continuous price rise of real estate in Mumbai, the city has become a favourite investment destination for investors.

In the recent years, the prices of Mumbai real estate have skyrocketed because of the limited land supply and also people are looking for luxurious residential units that could provide standard lifestyle. On the other side, the absorption rate is getting better as salaries of individuals have increased over the years which is a major factor that are helping home buyers to take a decision on purchasing Mumbai properties.

Mumbai real estate is a highly preferred investment destination as it might offer impressive returns. Not only the premium residential units are a hit but small homes are also in great demand. Singletons or expats always prefer to rent small houses as it easily comes within their budget and also serve their purpose. So, developers see an opportunity in the smaller houses irrespective of the rising prices of premium residential units.

The urban working class are well aware that finding a Mumbai property at a reasonable price might be a dream but they are confident that they can easily afford to buy at least two-bedroom apartments.

Property developers are also coming up with smaller residential units to meet the housing demand of the working class. Developers are trying to meet the demands by offering least two bedrooms possible. And to woo home buyers they are offering schemes and discounts which smart home buyers are taking advantage.

There are home buyers who are cautious while buying a property in Mumbai and take help of realty portals to collate information on trending properties and prices. Through real estate Mumbai portals, home buyers can easily find developers and builders who are offering residential units at highly competitive prices. For instance, Makaan.com, a leading property website that connects buyers and sellers, offers property listings making it easier for home buyers to find featured properties and apartments with specific to location.

Mumbai property developers who earlier believed that smaller residential segment gives lower margins now have realised that they are good investments in a one-bedroom category.