After touching unprecedented heights, the property prices in Mumbai have been reportedly stagnant for the past 3-quarters. Perhaps that's why, the investor activity especially in the residential properties of Mumbai has been catalyzing, say experts.
In Mumbai, investment in the residential real estate is mostly driven by the hefty end user demand, and since the capital values are cooling off and the absorption rates are on the downtrend, buyers and investors are expected to take advantage of the scenario. Interestingly, the rental rates in the segment continue to rise.
Capital Values and Rentals
Central Mumbai, regarded as the prime markets, continues to attract original residents and also cater to the growing needs of corporate employees in quest of proximity to work places. It has witnessed some remarkably high value transactions both for renting as well as sale. At present, the capital values for apartments in Thane are Rs 3500-5000/ sq. ft and Rs 6000-11000/ sq. ft in Sion.
Central Mumbai has also witnessed a fair escalation in the last 12-18 months although exceptionally high prices have resulted in apartments lying vacant/ unsold over extended periods.
Future Outlook
The price sensitive destinations in Mumbai, like, Northern suburbs have seen a drop in purchase transactions, as prices continue to surpass all the limits. At the same time, rental values in the same areas have also gone up, in the past couple of years.
Nevertheless, with projected supply in the coming 12-24 months, rental may even out and may possibly correct in the medium term. (A report by Cushman & Wakefield)
As far as future trends are concerned, the approval of Metro Project, construction of flyovers, new roads and bridges will perk up the state of infrastructure of the city. According to the professionals from the industry, around 300 builders have more than 1000 projects coming up in Mumbai at various locations, and long term capital gains are foreseen in the market.
