Mumbai is the financial capital of India. After 1947 the city has grown by leaps and bounds and now its civic services are over extended, yet people still wish to flock to this city. The result of this on the property market is deleterious, with the prices out of reach of most people.
Last year there was a slump in the real estate market and that gave a ray of hope to the lakhs of people looking to buy a home. They hoped this would be the beginning of the prices stabilizing to more affordable levels. However this year the scenario is quite depressing for the average home buyer. The prices are on the rise and more important the deeps discounts that were being offered last year are no longer there. developers of properties are also not over eager to sell as they expect a further rise in the real estate prices. home and property in Mumbai and Pune as well as the National capital region have risen by 15 to 50%.
This is pretty depressing news for an average home buyer. In terms of cost the average price per square foot which was Rs 6605 in 2008 had dropped to Rs 5770 in 2009. But this year the prices have shot up and the average price is quoted at 7640. thus the property prices instead of stabilizing are going up. Part of this rise is fueled by the developers themselves and partly by the inaction of the Government.
Flat prices being on the upswing is encouraging speculators to buy the houses, as a means of making a quick profit. But for the average buyer this is not possible. In addition the Government vehicle for affordable house MAHDA is moribund. It is hardly making any construction in the island city, as most of the land is cornered by the big developers. However the construction boom is on in Mumbai and Lodha builders have announced the construction of the worlds tallest residential building at Parel. The building which will rise to 117 stories will be an architectural marvel. Real estate trends in Mumbai, this is hardly cheering news.
The developers are now spreading their tentacles to the distant outlying areas of Mumbai. Thus the suburbs like Panvel and Raigad are being tapped. There also the prices are 50% higher than what they were last year. However the law of averages will prevail and this property bubble will certainly burst. One can wait for it.