Sunday, April 04, 2010

Who Is Jacking Up Property Prices In Mumbai? reports on issues much discussed on this blog for quite some time

By Sindhiya, Section Real Estate
Posted on Fri Apr 02, 2010 at 11:42:54 PM EST
A bunch of vested interests seem to be working together to fuel India's new property bubble, especially in expensive real-estate markets like Mumbai

Real-estate prices in India, which are already reaching for the stratosphere, are being further fuelled by a set of vested interests such as established brokerage firms and leading media houses through reports which exaggerate demand and suggest that realty prices may go up even further. Meanwhile, angry investors are struggling to get the regulators to act quickly and decisively to dampen the price escalation.

Recently, ICICI Securities released an all-India survey (across eight cities) which was headlined--`Affordability not a concern--healthy demand for homes at current prices: ICICI Securities survey'. A closer look suggests that things are not so rosy.

In fact, apart from vaulting prices, potential property buyers are outraged at how they are being cheated with regard to the actual usable area that is being sold to them. Moneylife has already reported on how the loading, which used to be anywhere between 20% (built-up) to 40% (super built-up) has now been pushed up to as high as 80% by several builders in Mumbai. With the government showing no signs of setting up a property regulator, builders and developers clearly feel confident that nobody will check their dubious selling tactics.

Another factor that has increased prices in Mumbai is the loading of taxes (in form of value-added tax (VAT) and service tax) on the already high price being forked out by consumers.

Source: Who is jacking up property prices in Mumbai?

Click On "Full Story" For More...

A research report circulated by ICICI Securities says that Ahmedabad has the highest inventory of 59%, Chennai has inventory of 10% while Mumbai has an inventory of 8% and National Capital Region (NCR) has only 1%. However, property experts are sceptical about these numbers. "It is a doctored report to show optimism. In fact, Chennai represents the least inventory and Mumbai & NCR the maximum. I am surprised to see such a false picture being painted by one of the credible brands," said Pankaj Kapoor, founder, Liases Foras.

For many media companies, headlines that point to property prices rising even further, usually translates into increased advertising revenue. In some cases, they have equity deals with realty companies which include an agreement to project reports that favour these companies. A reader has written to point out that some of these headlines sound like "quotes from the builder".

A senior executive of a leading information technology firm has even been writing to the governor of the Reserve Bank of India, pointing to how vested interests are pushing up property prices.


Anonymous said...

All this has been going on forever in India. Builders are the worst businessmen of the lot. The bad thing is that this time the politicians and ruling party is hand in glove and shamelessly giving a leg up to the Builders.

DLF's K P Singh is a close pal of PM Man Mohan Singh. They have in conjunction managed to rig the market. I don't think writing to the govt. is going to help much. At the same time this bubble is set to burst in 2011. If it doesn't inflation will be so high, the aam junta is going to take sticks and rods and attack the Congress party. So have some patience..the end is close at hand.

Anonymous said...

"Full Story" link is missing... can you please update the post?

william said...

my gut feeling is that everything is being managed till the common wealth games are over. as a feel good factor. Once that's over, there would probably be a crash. My two cents worth

Anonymous said...

Another price correction may be in the offing in realty space

World economy: China sounds alert over asset bubbles

Higher property prices put off buyers

There was a telecast shown on CNBC.
Many malls in Ahmedabad, Mehasana are not able to find customers. So these malls are either being demolished or closed or lying empty.

See, the way black money comes, it also goes away into the drain that much easily and quickly.
I could not stop laughing.

More or less, the situation in Real Estate is similarly grim and dull all over India.

So many bad news for Realty.
So much unsold realty, so many RE projects abandoned, suspended, incomplete.

RE crash is imminent.

Anonymous said...

anon @ 10:15

A lot of us share you merriment. I am happy too that ill-gotten gains are going the way the way they were made..for nothing!

You are absolutely right, RE is in a terrible state...the builders are sweating giant bullets right now. Soon RE will nosedive from the diving platform it has climbed to...

Anonymous said...

Those who are dreaming about bubble burst, please read this

MUMBAI: The city once again seems to have broken a national record in property transactions, with a duplex in the prime Samudra Mahal building at Worli fetching in excess of Rs 36 crore in an auction on Monday.

Although people involved in the transaction flatly refused to comment, TOI has learnt through reliable market sources that the deal worked out to more than Rs 99,000 a sq ft. The last highest transaction recorded was at the NCPA Apartment at Nariman Point in 2007 when a flat measuring 3,475 sq ft (super built-up) was bought by a London-based NRI at a rate of Rs 97,842 a sq ft (Rs 34 crore).

The Samudra Mahal duplex is situated on the 19th and 20th floors of the 28-storey, sea-facing highrise. The high net worth individual who won the bid is the wife of a prominent banker who died sometime ago. The duplex belonged to ABN Amro bank and the deal was brokered by the London-headquartered real estate adviser, DTZ. The duplex is spread over a built-up area of 3,640 sq ft and has four bedrooms and two covered car parks. The building has a swimming pool, a children's play area and a small football field.

Samudra Mahal is one of the most sought-after residential buildings in the city. One of the occupants of this building is the Scindias (family of the late Madhavrao Scindia). Industrialist Nusli Wadia once owned a triplex spread over 8,000 sq ft here. Four years ago, the Wadias sold it in excess of Rs 31 crore.

One of the losing bidders, representing a client at Monday's auction, said they walked out once they learnt that the bidding started at Rs 32 crore. "We had a budget of only Rs 25 crore," he said.

Pranay Vakil, chairman of Knight Frank (India), said the Samudra Mahal transaction was "not representative of the residential market, including the high-end luxury segment". "It is a one-off sale. People are willing to pay a premium for ready flats rather than for those still under construction," he said.

In May 2008, actor Vinod Khanna and his wife bid Rs 1.20 lakh a sq ft or Rs 30 crore for a 2,500-sq-ft (carpet area) apartment in the Il Palazzo building on Little Gibbs Road, Malabar Hill. However, the deal fell through a couple of months later.

Last August, a sprawling apartment in Maker Tower B building at Cuffe Parade was sold at the rate of around Rs 93,000 per sq ft or Rs 28 crore.

The auction of the 3,640 sq ft apartment in Worli's Samudra Mahal beat the mega deal of an NCPA Apartment flat in 2007 at a rate of Rs 97,842 per sq ft.

Anonymous said...

Anon :
Why didn't you make a bid for this apt ?

Anonymous said...

BB, Where are you? As per your advise I had purchased in December 08 for actual use. Kindly advise when should i exit. I would like to sell and go on rent. Is this the right time?

Please respond and thanks for all your help.

Atul Kulkarni

shailesh said...

Anon 6:35

At one point the land under imperial palace in Japan was worth more than entire state of California or entire Canada. Now it is worth 1/10th of it.

Inquilab said...

The whole government machinery is saturated with corruption. This is going to be the scenario if the current system continues.

73 killed as 700 Maoists entrap CRPF team
By: IANS Date: 2010-04-06 Place: Raipur

Seventy-three security personnel were killed on Tuesday when over 700 Maoist guerrillas in Chhattisgarh's Bastar region ambushed a 120-member contingent of the Central Reserve Police Force (CRPF) by first bombing and then opening fire

Anonymous said...


I fail to see any logic in your statement. Do you mean to say that the emperor of Japan's net assets decreased ? It would be interesting to know who assessed the property value. Does the imperial palace sitting on a gold mine. Please enlighten us

Anonymous said...

@Atul Kulkarni mama,

Has the value of the flat increased. Why do you want to sell it and go for rental. Is BB some kind of financial adviser of this forum. Please share your thoughts with us

shailesh said...

The Japanese Real Estate and Stock Market Bubble of the 1980s

Read Page 10....

The boom in real estate prices was even more dramatic. From 1955 to 1990, the value of Japanese real estate increased more than 75 times. By 1990, the total value of all Japanese property was estimated at nearly $20 trillion – equal to more than 20 percent of the entire world’s wealth and about double the total value of the world’s stock markets. While the United States was five times bigger than Japan in terms of physical acreage, Japan’s property in 1990 was appraised to be worth five times as much as all U.S. property. Theoretically, the Japanese could have bought all the property in America by selling off metropolitan Tokyo. Just selling the Imperial Palace and its grounds at their appraised value would have raised enough cash to buy all of California.

Sanjay said...

The article is good, but "who is jacking up the prices" hasn't been addressed fully I think. I have been planning to buy a house since 4-5 years and ths observing the real estate market closely.
Last year Samarpan Borivali quoted me 85 lakhs for a 3BHK apartment with area 1100 odd, in Sept 09. Then there was this MCHI expo in Oct 09, where the same flat had become 1350 sqft and the price quoted was 1.4 crore. I wonder what in one month they did to the house which added so much area/value. Similar was the case with Gosalia, RNA, Lodha Dahisar etc. And surprisingly they keep saying "Sold - out" "Sold-out".
Actually it is not only that builders are politicians' friends but actually it is the politicians who are the financers. The money stashed in SwissBank has to be repatriated because the Swiss Govt is under the pressure to reveal the accounts. So when this happens all the big Political families will be exposed. So the Swiss Govt is giving them sufficient time to withdraw their funds so that when the info is made public all these politicians will come clean as there will be no money in their accounts. Now if they are withdrawing their funds from Swiss Bank where will they park it, so a big politician will begin a Realty project like Lavasa city then small netas will invest in individual flats and lock them. Now if the ruling party continues to have vested interest in the various projects around the country, it is obvious that they will have to make policies and pretend that prices are soaring, thereby they get mental satisfaction of becoming richer every second.
How Sad it is that our PM and The Congress President are saying that "Inflation is sign of Development" and the media is touting that "Ever increasing Property Rates means growth in Realty" and inviting people to "Take Loans" and be "benefited" from this growing industry when they actually become slave of the bank/finacial institutes for rest of their life paying whopping sums as EMI.

SabbalSeshu said...

The price of apartments in mumbai suburb malad (west) witnessed an increase of nearly 40% in just 3 months time. The Raheja interface was selling for 8400sq.ft in Jan '10 is priced 11600-11800/ sq.ft today. Those of you living in Mumbai can easily verify the prices.
There is an acute shortage of good quality apartments in Mumbai and the price increase is due to the willingness of people to pay the price for decent flats. The current rate of construction can not meet the demand and the price rise is due to limited availability. This situation is expected to last in the foreseeable future. The government scheme to construct affordable hosing etc is just bull to fool people.

Those of you who have missed the train, there is still hope of getting decent accommodation in suburbs like mira road, virar etc. However, if you wait for the bubble to burst, this too will be unaffordable

Anonymous said...


I think you should not do sussuu in public...but if you must, I suppose you must.

Personally, I am waiting for the day when houses in Mira Road and Virar will become 15,000 rs/sft. With loading of 80% on carpet area.

That's the day, I will be laughing the loudest. And I suppose people like you will also laugh at people like me...we will laugh and laugh...let's see who has the last laugh :))

Anonymous said...

Prices have shot up all over slumbai. There is no significant change in white, but the builders asking 60% of the total in black. They are doing it openly. The government that is supposed to curb black money problem seems to be in deep sleep. At this rate, I dont think any ordinary person ever dream of home possession

Bindas Bhai said...


If you have brought a flat in December 2008 pls. do not sell. Mumbai will never those prices again.

Do not time the market but let me tell you for next two years RE in India especially Mumbai will see a bull market.

I expect Chembur which is around 12 to 14K Diamond Garden area will touch 20k(Premium Project) by May 2011. The worst part is carpet to sell-able ratio. This is very dangerous and will hurt RE investor in long run.

All the best!!!

Bindas Bhai

Anonymous said...


Mumbai, Apr 7 (IANS): In a significant initiative in the country's realty sector, a plan is on the anvil to construct 500,000 affordable houses at an estimated investment of over Rs.15,000 crore in the next five years in Mumbai and surroundings.

The lead in this project has been taken by the Maharashtra Chamber of Housing Industry (MCHI) which will partner with the state government and act as a "facilitator" for the mega project, said its president Pravin Doshi here Tuesday.

Besides Mumbai, the new homes are expected to come up in Thane in north and Raigad in south with emphasis on people in the annual income bracket of Rs.3-5 lakh, a critical segment needing nearly 11 lakh units in Mumbai alone, Doshi told mediapersons this afternoon.

Doshi said that an investment of Rs.15,000 crore will be required to realise this dream and the houses would be measuring 160 sq feet to 600 sq feet.

"More than 150 builders have come out in support of this project targeting the lower and middle-income groups and to provide them with quality houses at affordable rates," Doshi said.

As the first step, the MCHI is hosting a "Homes For All" convention here April 28 to hammer out the details of the proposal.

Later, the MCHI will sign a memorandum of understanding with the Maharashtra government to get the plans moving, Doshi said.

"Over the years, we have prospered and now time has come to repay to society. We are very serious about the project and have already started conducting different surveys for the purpose," the MCHI president said.

Citing a report by Cushman & Wakefield, Doshi said the demand for affordable housing is expected to go up by around 400,000 units each year in India.

"Mumbai has an immediate requirement of around 14 lakh homes, of which nearly 80 percent are in the lowest segment having an income of Rs.3-5 lakhs per annum," he explained.

The unmet demand in Mumbai and surroundings like Thane, Raigad and adjoining areas is mainly due to the steep hike in land, labour and construction costs.

Residential housing can be made affordable when the government releases land, increases floor space index, reduces taxes, ensures single-window clearance for construction projects and makes available micro-finance, Doshi said.

The MCHI was formed in 1982 and today has over 400 top players in the realty industry as its members, who together account for over 80 percent of the residential accommodation in Mumbai and surroundings.

BombayResident said...

Chiddu's Joke:

Finance Minister P Chidambaram has said that he expects the country's per capita income to touch Rs 1,57,240 ($4,000) by 2025," shattering all forecasts by global economic pundits.

"A BRIC report has forecast India's per capita income would touch Rs 31,448 ($800) by 2010 and Rs 45,167 ($1,149) by 2015.

But we have exploded this assumption as our per capita income has already touched Rs 39,310 ($1,000) this year and expect it to touch $4,000 by 2025," Chidambaram said.

The questions I am dyeing to ask Chiddu are:

1. Are we supposed to be proud and flex our muscles. Even a street child can tell that this statement is utterly untrue and falsified to boost the Congress party

2. Probably this statistical forecast may stand true for 20% of the population in Mumbai whereas the rest 80% will be cooling their heels in slums and defecating on the only available space, that being the rail tracks.

3. If the housing problem is not addressed Mumbai will be 80% Dharavi, and the rest 20% like New york surrounded by filth and squalor. What is the government doing in this respect ?

3. Why is the government allowing falsifying land registration records and where does the unaccounted money go.

Anonymous said...

Buyers file FIR against DLF over refund refusal

NEW DELHI: A group of property buyers have lodged a first information report (FIR) against the country’s largest builder DLF and its top executivesChoosing a home loan scheme after the firm allegedly reneged its commitment to refund about Rs 300 crore for a delayed project. The FIR was registered by Delhi’s Connaught Place police station in the last week of March and named, among others, billionaire promoter KP Singh and vice-chairman Rajiv Singh.

“They have diverted the money to other projects,” said a spokesman of DLF Okhla Allottees Association, representing companies such as Escorts and Haldirams, besides several high net worth individuals who booked space in the Rs 750-crore project.

The DLF spokesman declined to comment. But a person close to DLF dismissed the allegations as baseless and said the company will complete the project as per schedule by 2011 end. “This is a trick being played by the investors to withdraw from the project,” he said. Prices in the property market came down after the buyers booked space in the Delhi project and that is the reason why they want to take out money.

Close to 200 investors had booked office spaces and invested in DLF Towers in Okhla (Delhi) when the project was launched in March 2008. As per the initial agreement between DLF and the buyers, the property developer was to convert the land classification from industrial to commercial use within a year or by early 2009. As per the agreement, if DLF failed to obtain the land use conversion as per schedule, it would refund the buyers along with an annual interest of 9%, the buyers association spokesman said.

In March 2009, when DLF failed to get the conversion done, investors demanded a refund. The spokesman of the property buyers association said DLF agreed to return the money in May 2009, but it has not done so far. In mid-February, the buyers filed a case with the Economic Offence Wing and a police complaint, besides a case with the consumers’ forum.

The person close to DLF said the project is scheduled to be completed by 2011 and the builder has adequate time to transfer the property to a commercial unit.

This clearly shows that -

1) The investors have panicked and that means RE is in real trouble and a RE crash is imminent.
2) The Bindas Bhais and Ssussus are misguiding the forum by giving wrong misleading info regarding RE demand.
3) The builders misuse the buyer's payments. Builders either redirect buyer's money in another project leaving the buyer in lurch or they make payments where they are defaulting resulting in indefinite delays in flat possession.
4) A good lesson taught to a lawless RE company. It should be followed by arrest and punishment of the culprits.

Buyers, don't buy at unaffordable levels and help bringing RE crash sooner.

Anonymous said...

@Anonymous 12 35 PM

DLF is the biggest contributor to Congress and also the opposition BJP. Many from ruling cum opposition are in its payroll. What do you expect the courts do to them. Judiciary are the paid servants of politicians.

Don't jump at conclusions by reading some newspaper article. I also used to believe in the bubble theory and now after 3 years realized that everything is manipulated. Unless there is some kind of revolution, I dont think the property prices are coming down.

Anonymous said...

@Anonymous 12 35 PM
I dont think that you have gone house hunting.The newly constructed/under construction flats sell like as if they are free. I dont know where people get the money from, but the flats are sold like piece of cakes in mumbai. Just like other commodities , prices are rising because of the demand. Moreover, wherever I have visited, i have seen the flats occupied and therefore it is wrong to assume that investors are playing havoc. It may be that investors are buying and renting them out for negligible return.

An earlier blogger mentioned about the unlimited money inflow from foreign countries. This could be the only possible explanation. Government may be aware of this and dont want to do anything to upset the scenario. At this rate, we may see stability in home prices in 10-20 years and most of us dont have time/willingness to wait.

Welcome to the capitalistic diseases.

Anonymous said...

RE: BombayResident

FM's predictions have lot of flaws. There is no guarantee that Rupee Dollar value is assumed to be the current value. What if $ becomes 60 or 30. Ap per per capita, we are level 132 just above sub sahara. Further, the assumption that computer coolie business will continue unabated bringing in Dollars is far fetched.

Whichever way one looks at the situation, socialism would have served India better than the current system. At least majority people were happy when socialism was there. Prices were affordable. Now the situation is reversed. Iphones, honda cars have made life more miserable

Anonymous said...

Suddenly this blog seems very quiet!

Anonymous said...

We are quiet as we are waiting for prices to crash! :-)

MumbaiSlumlord said...

Prices are expected to crash during monsoon which is not far off. Rumours are that Bhindas Bhai and Sabalseshu are planning to flee to Dubai to join their mentor DLF Singh who has a palatial apartment in the newly constructed tower Burj Khalifa.
We will be shortly having the last laugh at them.

Suckers tried to pull our leg but see what happened. They may enjoy the company os Shoaib/Sania Mirza in Dubai, but we have our Sachin Tendulkar and car racer Nuri Haveliwala with us

Jai Hind and Death to Naxals

Mumbai_Slumlord said...

Haven't seen 50%guarantee_bhai for a while. Hope all his well. I miss is articles.

Long live Chidambaram and Death to NaxalBhais

Anonymous said...

No 1 BHK available!!!

You can see Sundaas Bhai and Sussuuu talking about abstract concepts like purchasing power parity and transfer pricing costs!!!

The gentleman with a beard...he looks like a snake oil salesman and talks like one!

Anonymous said...

Anon above:

You stink, stop talking shit and add value to this blog..

Anonymous said...

Anon above:

You stink, stop talking shit and add value to this blog..

Anonymous said...

If buying a house for investing, wait
There has been a rise in prices, but not enough push is foreseen in the short term.

After almost two years, real estate deals have started hitting headlines. For instance, in the last quarter of the previous financial year, Emaar MGF sold 650 flats, priced at Rs 48-80 lakh, in its Gurgaon project within a day of launch. And, a 3,475-sq ft flat in Samudra Mahal, Mumbai, was yesterday reported to have been sold for over Rs 99,000 a sq ft.

This is primarily because the stock markets have gone nowhere in the past six months. If one looks at the Bombay Stock Exchange Sensitive Index, the numbers have been range-bound. The Sensex was at 17,126.84 in September-end; yesterday, it closed at 17,126.84, a rise of 4.75 per cent.

Analysts feel the new interest in the residential property market is mainly because investors are staging a comeback. "Other than investors, sales in the last six months were to those who upgraded their houses or non-resident Indians making purchases. The interest from first-time buyers is still not prominent enough to support rising sales," said Raja Kaushal, executive director and chief operating officer at BNP Paribas Real Estate Advisory.

Investors are seeing more opportunities in residential property. By contrast, the outlook for commercial property remains bleak due to oversupply. Take the example of Mumbai, where eight million sq ft were added in 2009. Another estimated 11 million sq ft would hit the market in 2010. However, 12 per cent of the current supply in the city has still not been absorbed.

The interest in the residential segment has already led to an increase of 15-20 per cent in prices, depending on the location and the city. But, since buyers who are actual users are still sitting on the fence, experts anticipate a slight correction of around 10 per cent. "There has been some softening of prices in March and it will continue for some time," said one.

The resistance also means one should expect realistic returns before making an investment in property. "The significant appreciation over the past five-six months was only because the market had bottomed out," said Akshaya Kumar, founder and CEO, Park Lane Property Advisors.

Experts feel that in the coming months, there cannot be any significant price rise due to the cyclical nature of the property business. Developers sell more than 80 per cent of residential flats between October and March. This is the period when property rates increase. Also, experts note that interest rates on home loans are rising.

As a result, investors in property are not likely to get great returns in the short term. Currently, yields on residential real estate can range from as low as 3 per cent to as much as 5 per cent. This means the investor's annual earning through rent will be much lower than what he can make in a bank fixed deposit. This earning becomes almost zero if the house has been bought on a loan. Experts, hence, say that one should invest in a property after taking the future appreciation in its value into account, rather than the rent.

"We are advising clients to look at projects cautiously and have a holding period of four-five years," said Kumar.

For those looking to buy a residential unit for investment, experts said it would make sense to wait for another quarter before doing so. Also, while the prices correct, don't invest with a developer who is just starting out. Rather, look for projects that are at least 50-60 per cent complete.

"Such projects will be 20 per cent cheaper than the existing value in the area and will also have surety of completion," said Anuj Puri, chairman, Jones Lang LaSalle Meghraj. "Look for opportunities in Tier-I cities only. They have displayed better resurgence in the past three years since the global economic downturn," he added.

Source: Business Standard

Anonymous said...

The "experts" say this and the "experts" say that...

Articles like the one above are such a bunch of crock.

Who are these experts? How did they gain their expertise? Experts for whom? Do these jokers think we have an IQ of 75 or so?

In the end it quotes the usual suspect Anuj Puri of Jones ...A renowned joker. Who I suspect sometimes to be Sundaas Bhai or Susssuuu who comes here and posts crap here!! :))

Anonymous said...

Denial is what cowards seek solace in. Let us forget about experts, their forecasts/predictions etc and come to terms with the ground reality. The fact is that housing has become unaffordable to 95% of the population. The rest 5% along with the highly corrupt government are devastating the commoner denying him/her shelter.
This clearly illustrates that Indians are incapable of ruling themselves. What we need is invite global tenders to outsource the running of the government. Let some country like UK, France or USA takeover India so that common person does not have to suffer the tyranny of Banias, Sindhis, Bhais corrupt illiterate north Indians

Anonymous said...

Anonymous 4:36

Have you been sleeping all these years ? We have been governed by Italy and since Italy took over the admin and introduced Mafia in India, things have taken a different shape. The industrialists are in fact Capos and Sardar MN Singh is the consulgieri.

Anonymous said...

I have been following both sides of the debate on this forum and frankly, I think Sabbalseshu and bindaas Bhai may have a point. It is good to encourage both sides of the debate.

Seshu/Bindaas, I have noticed that your comments have been restricted to the Mumbai market, since I am assuming that you follow that more closely. Can you please advice me on the bangalore market? What do you guys think about current real estate prices in bangalore?

Anonymous said...

Hey I stareted following this blog in 2006 . i just kept my 40 lack rs. Now I am not able to buy anything in Navi Mumbai. My plan was to buy at Cadel Road or Prabhadevi as price were supposed to b 25% of that times ( 2006a) value, Insted of that it is now 200-300% of that value.

So all the visionaries till what time i'll wait?

Anonymous said...

Anon above (40Lakh),
You are taking shit-rubbish mann...tell me what you did with your 40L in 2006..?? must have lost it in horse racing :))
Stop telling us any crap here...
If some one tell you to jump from the sealink bridge, will you jump???

Anonymous said...

are you kidding me, there are many apartments availbale in navi mumbai between 25-40 lakhs in navi mumbai, just work with broker or STOP posting crap here. may be you are one of the developer or investor trying to speculate prices here.


Anonymous said...

Mumbai is the most sought after destination, no doubt it. I have friends who work in USA but are actually from south india. They formed a group and invested in a upcoming project availing of loans in USA and buying property in Mumbai. To cut the story short, the reason why they do it is coz there was an immediate demand by the end user when they tried to sell the property and made a cool profit. They did not try it any state of south, coz there are lot of projects but no return on investment. Add to the investors, there is a genuine demand from the end user and people who migrate to Mumbai for a better job and top notch education for the kids. Look at the job prospects and salaries being offered in Mumbai, no where in the country can anybody match it. Also due to the heavily cosmopolitan nature of the city, people pour into the city. Females leave offices at late in the night without any worries coz it is safe city. Check the amount of females paying rent of 40,000/ month. They can afford it coz they are paid that well. By the next 10 yrs and the kind of infrastructure projects happening in the city. This will be a global city. Investing now will be the safest bet for any individual. Be it Mumbai, Navi Mumbai , thane etc. it depends on ones call but one will surely not loose money. With congress govt in the state and the center there is only one key word in the city "Development"

Anonymous said...

I would highly recommned people read the book called "Manais,Panic and Crashes "by Charles Kindelburger. Personally, after reading this book and looking at histroy of capitalism and how it has turned out in western countries decades before, I feel very certian this is going to happen soon in India.It is just matter of time.

India's population has been high for many decades. People were still living and buying house as and when they required/desired. How come suddenly in last few years this sudden demand came in ? Demand came in from investors who wanted to become landlord ( mostly because of NRI's who worked hard ) oversees with dream of returning to India. Government/Politicians saw this as opportunity to fool these investors.Few years back, it seems government realized that if they create "image" of India as good place to invest( with help of politicians/builders), money will keep coming. They changed laws to allow unprecedented construction everyehere and create "Artifical" demand.

After the downturn,the govenment in conjunction with builders have now entered in a vicious circle whereby goverment now feels compelled to keep builders afloat and allowing them to do anything to keep property prices artifically up.

Builders have total accumulated debt in excess of 25000 crores. Think of interest payment on these loans which builders/developers have to pay. Banks are sitting on thes huge loans and government is saying nothing, rather letting the "Valuations" increase uncontrobably. This paper valuation increase gets reported in media and investors in US, UK ( without fully understsnding whats going on) get fooled and invest money in India for sentimental reasons.

I think it is matter of about a year or 2 year when one would see major corporations and builders in India defaulting on loan and some bank run. Everybody will loose and will loose big.It has happened before and will happen again. Whenever markets get too much ahead of itself it fails.

Just imagine what happen if major international banks/ hedge funds pull about 20% of money bak from India.Liquidity will dry up, lending will stop, debt intrerst will keep piling up and then eventually corporations/builders will default. This all can happen in months! may be in weeks.

I sincerely hope sanity returns in market sooner than later.

Anonymous said...

Sone ki Lanka Hanuman ne jalayi thi. Sone ki Dwarka pani me dub gayi thi. Sone ki Mumbai buildero ne nigali hai. Mumbai will also submerge in sea. This rush is before silence.

Abhijeet said...

Please go through my blog . I wrote one article about the New Airport at Panvel and its possible impact on the public and personal health.


Abhijeet said...

rajni sharma said...
This comment has been removed by the author.
HcoRealEstate said...
This comment has been removed by the author.
pushpendra yadav said...
This comment has been removed by the author.