Investment on property in Mumbai

Real estate prices in Mumbai have shot sky high in the past decade or so, fueled primarily by the globalization of the Indian economy and NRI (Non-Resident Indian) investment. Land in the Mumbai suburbs, which used to sell as low as Rs 750/square feet. Prior to 1991, is now priced at over Rs 2200/square feet in certain prime areas. Although the booming real estate market is said to have now reached its saturation point, prices continue to stay strong, supported by an economy that continues to grow despite fears of a slowdown.

Before 1991, India was a rather closed economy. Even Coke and Pepsi were not available anywhere in the country. But from 1991 onwards, the government began to slowly open its doors to foreign national companies. The real estate in Mumbai market did see a downtrend around 1995, but again picked up momentum towards the end of the nineties. Ever since then, real estate in India has been mostly heading upward. Mumbai real estate has played a part in inflating the property market but several fundamental factors were also at play.

Globalization and privatization of several industries led to a lot of foreign investment for Mumbai properties. At about the same time, NRIs began to invest in real estate back home. There are NRIs in almost every country in the world, with USA, UK, Canada, Australia, Singapore, South Africa, some European countries, and the Gulf countries having the largest number of Indians. The US alone has over 2 million Indians, most of whom are doctors, scientists, engineers, and other professionals. Apart from the money got by Indians living overseas, another major factor for the booming real estate market, especially in urban areas, was population growth. India is a country of over 1 billion people. Recent years have seen more people migrating to cities from the rural areas in search of better jobs. And of course there is also the migration of professionals from various parts of India as well as the world to financial hubs like Mumbai, which further adds to the demand for living space in such cities.

Mumbai properties have a big demand by foreign firms, especially those in the Information Technology sector and financial sectors. It helped that Mumbai properties have a pleasant, relatively moderate climate which is good for the people. The culture is a bit more cosmopolitan than other south Indian cities, which makes it slightly easier for foreigners to live there.

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Mumbai Real Estate Market

The Financial Capital of India is a hot favorite destination for Multi nationals Banks and various other companies. Mumbai being an island city has limited Central Business Districts and it becomes easier at times to make a choice considering the few options you have. Mumbai is well connected by Local Trains and an extensive network of BEST which runs the local buses in Mumbai. Office premises in February 2009 are at their peak in each location. The pressure is on a quality Commercial Corporate office complexes with limited availability left. The demand for real estate in Mumbai varies accordingly.

The real estate in Mumbai has grown at a furious and tremendous pace in Mumbai. In the year 2006 the Capital Values for Example in Andheri East were say Rs.7000/- PSF and now in 2009 the same are nearly Rs.15000/-. The same goes for lease rental values the same earlier were in the range of Rs.75/- to Rs.100/- for Prime Commercial Properties and the same are quoted more than double the price as for as Property in Mumbai is concern. There is a huge demand for properties in Mumbai and Apartments in Mumbai even in the crisis situation.

The real estate market in Mumbai is tipped to be the one of the most expensive in the world and it is definitely increasing at a rapid pace. There is limited availability of quality commercial offices on Sale and Lease and hence the prices are sky rocketing few years back. But now for some localities the prices are coming down. There will be some good quality office space of large floor plates coming up in Suburban and upcoming locations like Andheri East etc. in a few years now. There is immense dearth of good quality smaller offices in the range of 1000 to 3000 sq.ft and especially in furnished condition.

Vacancies for all prime building across Mumbai have declined over the last few quarters with increased absorption levels the prime building in the CBD, central Mumbai, Airoli and Parel micro markets are witnessing limited space availability for real estate in Mumbai.

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