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Mumbai Real Estate

Mumbai, the land of dreams is a Pied Piper which has attracted millions to its fold. The outskirts have continuously grown and today workers travel 100 kms to their workplace in Mumbai as affordable housing is just beyond reach of the middle class. But there is no respite from the rising property prices. The suburb of Andheri where one could find decent housing alternatives has quadrupled in value in last three to four years. The prime Mumbai property today is priced more than that at Manhattan.

Do You Have a House? The first question that pops out when you meet an acquaintance. A house of his own is ingrained in the psyche of an Indian. He works sixteen hours a day, doing two jobs, works on a Sunday to add few more just that he could own a house. In the early nineties, a decent flat would cost a few lakhs and the early 2008 it costs a crore of rupees. Yes this is the reality of real estate in Mumbai. The jump in two decades has been a phenomenal thirty to forty times.

The Infrastructure Companies. The stock and share prices of infrastructure companies like Ansal Housing were trading below par in the end eighties and early nineties. Today, infrastructure is the buzz word. Any company which moots the idea of investing in real estate finds its stock zooming. The companies like Raheja, Hiranandani, Sahara Group, DLF have huge land holdings at mind boggling valuations adding to total worth of the company.

The Mall Culture. The phenomenon of the new millennium, at least in India is the malls and shopping arcades. The good old corner multipurpose shop is fast becoming history. The big companies like Pantaloons, Reliance have all joined the retail bandwagon. These companies with tons of surplus cash purchase land at exorbitant prices fuelling the real estate market. Today Mumbai is dotted with malls in every suburb and plans are already afoot for more.

Indian Government Impetus on Infrastructure Development. The Indian government has given special concessions to individuals and companies for infrastructure development. The individual finds that if he pays Rs. 20,000/- as rent he gets no sops in the income tax. On the other hand if the same amount goes as EMI or mortgage on an apartment, he saves upto Rs. 7000/- in income tax. So why would he not buy a home. The growth of Indian economy and political stability has found the NRIs and foreigners investing in the Indian growth story. The recent rise of the rupee against the dollar has fuelled interest in India.

Mumbai adds an average of a million immigrants each year. Whether the government gives sops on infrastructure or levies fresh taxes, the Mumbai reality would only have one way and that is up up and above.
 

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