subject: Real Estate Prices In Mumbai [print this page] Real Estate Prices In Mumbai Real Estate Prices In Mumbai
The real estate market is showing peculiar trends these days. The sales for home properties have nearly halved as compared to the previous years' figures. One of the main reasons is that since the Information Technology (IT) boom is over, NRIs are hardly pumping money into properties. Inspite of this, the developers have refrained from slashing prices to keep their heads above the water.
Developers say that inspite of the drop in sales; there is a little chance of the real estate prices going down. This being because the prices of labour, iron, steel, sand and cost of construction going up. The land owners are not reducing prices either and many properties are under litigations or occupied by slumlords: So it becomes infeasible to slash rates by anything more than 5-10%. Also, the cost of apartmentss are set to rise some more after the Bombay high court recently lifted the stay on recovery of service tax from customers. The service tax is 2.5% of the total cost of the property. This means that if the flat cost is Rs20 lakh, the customer has to pay Rs. 50000 as service tax.
An example of these high prices can be seen in Mumbai's Lower Parel area, which is now rapidly becoming a hot spot for the rich. Homes in the textile mill area, which used to be sold anywhere between rupees 3,000 ($66) per square foot to Rs. 6,000 ($132) per square foot in the early part of this decade, are now priced between 15,000 rupees ($330) and 30,000 rupees ($660) per square foot as luxury homes. Also prices in the most sought after locality Bandra is not going to come down either as non availablity of open land is the major issue. Areas like Bandstand, Mount Mary, Carter Road, Pali Hill are the most expensive.
On the other hand, the demand is decreasing because property prices have gone beyond the reach of the common man and delevopers are not building any affordable homes. There is a huge demand for residential properties but people are waiting for the prices to come down. So, with the sales dropping by over 50% as compared to last year's figures, the pressure is mounting on the developers to slash prices. Hence, discounts on property of anything between 10-15% could be expected soon.
