Mumbai Property Rate Slide Arrested
The entry of transnationals, along with heightened industrial activity of the domestic private sector led to an upsurge in the demand for commercial prices and, in turn, residential accommodation.
In this first part, realty player Lloyds Brooke Hillier Parker Property Services looks at the property markets in the metropolises of Mumbai and New Delhi.
Mumbai: From the middle of 1995, i.e., over the last 24 months, outright values have crashed by 20-25% as a technical correction from the 5-year boom.
Also Read
During the boom, prices of commercial premises in certain buildings in Nariman Point were among the highest in the world higher even than Hong Kong and Tokyo. These higher property values led the multinationals to shift their headquarters from Mumbai to cheaper locations such as Pune and Bangalore.
Prices in Mumbai experienced a drop of between 15-25% from their peaks. There has been a substantial fall in the volume of transactions, estimated at about 20% of the volumes prevailing about 18 months ago.
Nevertheless, prices of commercial property have firmed up in recent months and the gradual decline has been arrested.
Nariman Point (average office rate Rs 15000-Rs 20,000 per square feet) is considered to be the prime business district, while other areas such as Cuffe Parade, Marine Lines, Churchgate, Fort and Ballard Estate have been growing in importance.
There has also been a trend of corporates shifting from Nariman Point to central areas such as Worli, Prabhadevi and suburbs such as Bandra. This is due to the availability of new and affordable commercial space in the suburbs.
In Nariman Point, the rents ranged between Rs 160-Rs 200 per square feet per month plus an interest-free deposit. This year, the prices have seen a downturn by 30-40% in the prime locations of South Mumbai up to Mahalaxmi.
The best areas, particularly in good buildings, witnessed a decline as well, although it was considerably less than the average.
The values in good properties declined by 15-20%. The luxury rents continued to remain high in the metropolis. The rents in the secondary locations slided by 15-20%, mainly due to the tight liquidity pressure in the middle-income group.
Navi Mumbai: It started as a parallel city to Mumbai and is gradually developing into an independent, fully self-contained metro. It is the worlds largest, totally planned well-balanced beautifully landscaped modern city. it covers an area that is more than three-fourth the size of Mumbai.
Navi Mumbai has witnessed peculiar movements in the real estate prices, both commercial and residental.
During the 1991-95 boom, while the residential prices escalated through 1994, it saw a slide since 1995. the falling trend continued in the following years till 1997.
Prices in areas such as Vashi and Panvel have seen a downfall only in the middle of 1996 and this year.
This has been attributed to the concentrated activities of brokers who eventually speculated the price, but disappeared from the market following the slump. there has been a slide in the prices even this year.
New Delhi: While the real estate scene was very sluggish throughout the country since 1995, the capital had a different story. The residential prices in prime areas have been on the ascend.
The commercial property prices that had triggered off in 1994 gradually came down to stabilise at a more realistic level; this was the movement in the most prime locations.
In other areas, the prices that took off in 1994 steadily went up and settled at a higher range. This year the commercial prices have been nearly moving within a band of Rs 12000 to Rs 15000.
The rentals in Delhi have a high element of deposit money, hence it is difficult to apply standard formula to calculate the rentals for both commercial and residential.
Residential Commercial
(Rs/sq.ft) (Rs/sq.ft)
SOUTH MUMBAI
Cuffe Parade 8000-9500 9000-10000
Nariman Point 10000-11500 9000-11000
Churchgate 9000-12000 9000-11000
Flora Fountain 5000-7000 7000-10000
Malabar Hill 9000-12000 12000-16000
Walkeshwar 9000-11000 12000-16000
Peddar Road 8000-11000 12000-12000
Worli 7000-11000 8000-12000
Prabhadevi 6500-8000 7000-11000
Parel 3500-8000 5000-8000
Dadar 4000-7500 5000-9000
Western Railway Suburbs
Bandra 4000-6100 5000-9000
Khar 3000-4000 5000-11000
Santacruz 3000-5000 5000-7000
Juhu 4000-6000 6000-9000
Vile Parle 3000-5500 6000-9000
Goregaon 2200-3000 2500-6000
Malad 1800-3200 3000-9000
Borivali 2500-3500 3500-7000
Mira Road 600-830 1500-2000
Vasai Road 650-900 1500-2500
Virar 600-900 1000-2500
Central Railway Suburbs
Wadala 3000-3500 3500-6000
Kings Circle 3000-3500 4000-7000
Sion 3000-5500 3000-7000
Chembur 2200-3750 2500-7000
Ghatkopar 3000-5500 3500-10000
Mulund 2200-3200 2500-4000
Thane 1500-1800 2500-4000
Dombivli 700-1100 1000-2000
Kalyan 900-1400 1500-3400
Badlapur 600-900 1000-2000
New Bombay
Vashi 1700-2200 2000-6000
Koparkhairane 900-1400 2000-3500
Sanpada 900-1600 2000-5000
Belapur 1500-2000 2500-4500
Panvel 1100-1800 2500-3500