The Mumbai residential property rates, touted as the most costliest in India, appreciated by a whopping 66% during the last four years, quashing reports of an 'imminent correction', according to a report.
Other satellite areas such as Thane and Navi Mumbai saw an even steeper rise in property prices compared to Mumbai's average increase, growing by 70% and 74%, respectively.
"Residential property prices in Mumbai have increased steadily after the correction seen post the Lehman debacle. In the period from the second quarter of 2009 to the same quarter in 2013, residential real estate prices in Mumbai have increased by 66%", said a report prepared by Jones Lang LaSalle India (JLLM).
Within Mumbai some locations have crossed the 66% average increase in the same period. The Malad–Borivali belt has seen an increase of 85% during the period (2Q 2009-2Q 2013) beating even Gurgaon and Bangalore, two of the hottest real estate markets in India which saw increases of 52% and 46% respectively.
Ramesh Nair, managing director (west), JLLM, said, "One of the primary reasons for Mumbai's 'unreal' price movements is the limited supply of ‘clear’ land. Other factors at play are the reduction in new launches over a 1.5 year period from 1Q 2011 to 2Q 2012 - caused largely by a slowdown in approvals for new projects - and the high interest rate scenario in 2010-2011. In this period, the Government - in its efforts to curb inflation - raised lending rates around 12 times."