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Mumbai Real Estate Report: update 2012 Mumbai is the economic powerhouse of India. In 2009 the city was mentioned as an alpha city (the engine of economic growth of the country and the gateway to the countries resources). It is the richest city in whole of west and central Asia. All of this led to high immigration and real estate investors flocked to Mumbai which led to enormous investments on a relatively small real estate and mortgage market. How attractive is it to invest in Mumbai Real estate? Should or should you not buy property in this relatively new alpha city? We are proud to present you this Mumbai Real Estate report. We aim to give you insight in what to expect about the development of Mumbai Real estate over the next years. The Mumbai-Real-Estate.in Team researched many variables, future scenarios and consulted experts. In the first chapter we look back to the recent history of property and investments in Mumbai, in the second chapter we talk to professionals and look at Residex numbers and the current state of Mumbai Real estate. The third chapter will be about the future of Mumbai property. 1. Mumbai areas 2. Mumbai real estate: a brief history 3. Current state of Mumbai Real estate 4. Mumbai real estate prices (graph) and most expensive areas 5. Future of Mumbai real estate


1. Mumbai areas Cuffe Parade – Cuffe Parade M umbai on Google M aps This is one of the most important areas of Mumbai, investors have flocked to this part of town over the last years. Property on this peninsula is hot, prices rose a stunning 13,29% over the last year. Ghatkopar East – Ghatkopar East on Google M aps Ghatkopar was a small village in the beginning of the last century. With the growth of Mumbai Ghatkopar become part of the suburban area. Ghatkopar W est - Ghatkopar W est on Google M aps This are is strictly for government staff. This special colony has its own medical facilitites and modern appartment buildings, over the years (due to the central government staff) this has proven to been quite a stable area for property investments Khar W est – Kar W est on Google M aps Khar East is still quite crowded and undeveloped today but Khar West is home to many Bollywood celebrities and inustrialists M arine Drive – M arine Drive M umbai on Google M aps Marine Drive is a 3 kilometres long promenade and hosts many new hotelsbuilding projects and large residential appartment complexes. It is one of the upcoming ares in Mumbai, therefore there are no numbers available from 2010. As per last year real estate prices overthere are one of the highest in the world at US$2,100 per square feet. Santacruz – Santacruz M umbai on Google M aps Originally Santa Cruz was a municipality of parishioners, nowadays it is an area with a rich history and some great historical buildings.


2. Mumbai Real estate: a brief history In the nineties the Indian IT sector saw an enormous rise. Foreign companies flocked to Mumbai and other important IT-hubs attracting IT staff and managers from all over the country. A new and modern middle class started to look for appartments and companies where looking for new and modern office spaces. Investments in real estate where mainly demand driven, the dream of any property investor. From then on, real estate companies started to consolidate and invested in bigger projects. In the early 2000’s investing in real estate was extremely lucrative. Mumbai’s residential property rates skyrocketed from 2000 to 2006. By 2006, the Mumbai real estate prices where worth 100 times the average income, in a short period of time residential buildings became too expensive for the masses. Average sales prices more than doubled. By 2008 the Global Financial crisis hit Mumbai. Demand for luxury housing decreased by 50% in a single year. Please read more about the real estate prices and numbers comparison here.

3. Current state of Mumbai Real estate, oversupply? In 2009, investments were at an all-time low. But, compared to other cities in the world, the decrease in investments was much lower. From 2010 the the mumbai real estate prices where slowly increasing again. As you can see in the numbers on the next page, Mumbai’s main areas showed quite some good numbers, varying from a rise of 6,61% in some areas to an increase of over 18% in other areas. In these years foreign investors started to discover Mumbai and local investors are still taking a big part in the overall investments. The real estate in Mumbai is now almost 50% more expensive than areas in the UAE (Dubai). According to the Economic Times, the overall realestate prices in Mumbai have risen by almost 50% since 2009. Could numbers like that cause investors to go abroad? Will those numbers eventually caus a correction? Or will real estate in Mumbai be ever so popular? Traditionally Indian investors where always keen on investing in Dubai, realestate Mumbai prices have been going down in the UAE which makes investing in real estate Mumbai more attractive than ever. Now, in 2012 Mumbai real estate rates are starting to get under pressure, the number of investors that previously invested in Mumbai real estate, is now moving their focus to the UAE. Wealthy locals are investing in Dubai real estate as Mumbai realestate values and sale decline. The estimated supply of office unites in real estate Mumbai is around 25million sq.ft. 33% Of that office space is located in the western suburbs: Bandra-Kurla Complex, Andheri, Goregaon and Malad and 27 % is located in the central areas: Kurla, Wadala, Ghatkopar and Thane.


4. Mumbai Real Estate prices graph Mumbai real estate prices have seen a big rise over the past few years. But how big is the rise exaxctly and in which areas the real estate prices rose most? In this article an overview about the most important changes in prices and a brief background analysis per area. If you are interested in reading more about Mumbai Real estate prices, read this article. M umbai Real Estate prices graph, rates and numbers real SALE

estate

real RENT

estate

Average Price

Average Price

(Rs./Sq-ft)

(Rs./Sq-ft)

Dec. 2011

64,842

-

Dec. 2010

57,233

129

Cuffe Parade

13,29% Ghatkopar East Dec. 2011

13,422

-

Dec. 2010

11,448

41

17,24% Ghatkopar West Dec. 2011

11,123

29

Dec. 2010

10,341

27

7,56%

7,41%

26,501

76

Khar West Dec. 2011


Dec. 2010

24,397

81

8,62%

-6,17%

Dec. 2011

77,758

152

Dec. 2010

70,998

146

9,52%

4,11%

Dec. 2011

-

102

Dec. 2010

-

131

Malabar Hill

Marine Drive

-22,14% Mumbai Central Dec. 2011

20,911

91

Dec. 2010

38,598

87

-45,82%

4,60%

Dec. 2011

71,568

139

Dec. 2010

67,132

-

Nepeansea Road

6,61% Santacruz East Dec. 2011

15,786

44

Dec. 2010

13,299

42

18,70%

4,76%

Dec. 2011

23,675

66

Dec. 2010

21,771

65

8,75%

1,54%

Santacruz West

*Source: comparison of 10 different Real Estate Websites and the central statistics Bank: residex


Areas of M umbai with highest real estate prices: ● Cuffe Parade ● Marine Lines ● Nariman Point ● Malabar Hills ● Nepean Sea ● Khar ● Santacruz

5. Future of Mumbai Real estate Real estate Mumbai Sale: opinions about decline differ Cushman & Wakefield state that the real estate mumbai market will decline this year. Nobody can state exactly how much it will be but estimations vary from 10-25%. Richard Green (University of Southern California, Lusk Center for Real Estate) says that in India there are no major concerns about an upcoming real estate bubble in 2012. However, Mumbai’s property market is probably overvalued, which would make a correction this year more apparent. There is an housinge shortage which will make a steep decline less apparent. It is a poor country with a lot of differences. Some areas in real estate Mumbai the square feet price is $2,200+ to buy, other areas are around $100 square feet. Average sales are between $200 to $300 square feet. That’s still quite expensive, for example a tiny 400 square foot home would be $130,000 with a income per capita under $2,000. Please go the this article about Mumbai Real estate prices for an overview of most expensive areas.


The Bank of America Merill Lynch predicts real estate prices in Mumbai to fall in 2012. They predict the mumbai real estatepricescould fall a shere 15-25% over the first six months in 2012. Are Merill Lynches’ predictions realistic? In this article I will look back to the real estate developments over the past decade and explore if the negative outlook is realistic. Mumbai is one of the biggest emerging economies in the world. Real estate prices in Mumbai have seen a huge price surge since the Global Financial Crisis. Since the surge there are numerous concerns about the posibility over housing bubbles mainly fed by concerns over the fact that the masses are not able to afford the expensive housing that is being built. Mumbai is turning in to one of the most expensive cities to live in. In 2011 the Indian government took measures to deal with rising real estate prices in Mumbai. Those measures left many of Mumbai’s developers with fund shortages. Over the last years a lot of new projects started. Some experts are deeply concerned about an oversupply in this year and the next (2012 and 2013). They predict the real estate prices in Mumbai will fall in the near future.

Residex, The Indian National Housing Bank’s property price indicator still showed a moderate price index increase of 4.5 percent in Mumbai in the second half of 2008, compared to the first half of that year. Real estate developers in India built (mainly encouraged by the governments) on large spots of land and by the end of 2010 Rs.120 billion (US$2.7 billion) has been spent on large land inventory projects alone. The big question: W ill real estate rates fall in 2012? Concluding: Alltough opinions vary, the real estate prices of Mumbai are expected to drop in the end of 2012 or at least in 2013. In fact, prices have already started to decline in some areas such as Lower Parel, Mahlaxmi, Andheri East, Parel, Bandra East, Kurla, Goreagon East and Mulund. The overall mumbai real estate prices have seen a 20% decline from the peak level in 2006. Beginning 2011 many India property stocks fell by up to 27%. Last year there was a lack of funding of developers, which put many projects on hold, leading to lowering prices for attracting potential buyers. Our conclusion is that chances are prettyg big the real estate sector will see a decline in real estate mumbai rates for the coming year. Please look into this article about Real estate Mumbai for more information and expert opinions.

Mumbai Real estate prices - whitepaper report and trends 2012  

Whitepaper report about Mumbai real estate prices and trends, brief history, facts and figures 2012

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