Monday, July 12, 2010

South Mumbai bungalow to go for Rs500 cr

The party is on. Keep playing the music as everyone is in a drunken stupor.

Just by the numbers.

Mumbai's population : 2,00,000,00 people
Next year ** projections ** of sale of luxury apartments : 7,000 flats
Ratio 7000/2,00,000,00 = 0.035%
Looks like someone has a vested interest in reporting local news affecting 0.035% of the population.

DNA India reports

Orbit, which owns 50% stake in the property — 25% purchased on its own and 25% through Om Builders — is negotiating for the balance 50% stake with the other family members (about 70-80 signatories) of the well-known philanthropic Kilachand family. Spread across 9,000 sq mt, the spacious bungalow is expected to cost Orbit roughly Rs500 crore.

The Mumbai developer, known for its upscale residential projects, is in the final lap of raising Rs350 crore from a private equity fund for the project. Acknowledging the move, Pujit Aggarwal, managing director of Orbit Corporation, said the bungalow is strategically located on Napeansea Road where flat prices are over Rs40,000-Rs50,000 a sq ft.

According to Aggarwal, his company is also in talks to purchase three other plots on Napean Sea Road for its first block redevelopment project in the tony neighbourhood. The three sea-facing plots will be consolidated for a luxury housing project, generating 300,000 sq ft of saleable area.

Acquiring dilapidated properties and redeveloping them is the only way to build new projects in areas such as south and central Mumbai, due to a paucity of open land there.

According to Knight Frank, a global property advisory, while there is a potential problem of supply overhang of luxury projects in central Mumbai areas such as Lower Parel, there is huge demand for such high-end residential developments in south Mumbai because supply is restricted. Incidentally, consultants have estimated that around 7,000 luxury apartments will be sold within a year in Mumbai, with each unit priced at more than Rs4.7 crore.

22 comments:

Anonymous said...

http://timesofindia.indiatimes.com/india/8-Indian-states-have-more-poor-than-26-poorest-African-nations/articleshow/6158960.cms

Anonymous said...

Poverty is self inflicted. A person who can't afford to meals has one dozen kids in those states is nobody's fault. One has to close his eyes at these pathetic scums and enjoys the fruits of his labor.

500 cr may look astronomical, but the builder has plans that may earn a handsome profit. say 200crs

Anonymous said...

Rs 4.7 Crore looks a sprinkle for ultra rich. I hope they come out with better number like 20 crores or so.

What are the major jobs/occupation in Mumbai except for dalal street? With price rising, many IT companies have moved out and in coming years many others will move out.

Anonymous said...

IT employees are not rich. Their presence or absence doesn't make a difference to mumbai real estate.The real rich guys are black marketers, govt bureaucrats , gangsters etc

Anonymous said...

I know so many IT guys who have purchased flats in Mumbai for 50 to 70 lacs. I know one guy has two flats and says he can buy one more for 80 lacs! IT workers are not rich you say? Recent years that's what fueled economies in Bangalore, Pune, Hydrebad, Chennai and started with Mumbai.

So you think that ultra rich in Mumbai are black marketers, govt bureaucrats, gangsters etc... and what makes them stay in Mumbai? Somebody has to give for someone to take. Black marketers are robbing other black marketers... that would be good.. isn't it!

Whatever it is in Mumbai, it doesn't fall into my logic of purchasing power calculation.

May be I am in denial.

Anonymous said...

To buy 50 lakhs flat, one needs at least 20 laks in black. The IT guys who buy flats are sons of kaala danda or related to people in government. No IT company pays unaccounted money to its employees.

No doubt IT companies pay good salary but current cost of living it is barely sufficient. I am highly paid (make about 12 lakhs per year) but I can not afford to buy a flat in Mumbai.

Anonymous said...

today, an guy who makes building in partnership told me that prices are going to increase 25% by diwali as there is good demand for flats.

Anonymous said...

anon@1:35

That's exactly what this market is reduced to - gossips and rumors. Ask your friend why 25%? If there is demand and people are able to stomach ridiculous prices..then go for it..charge them 100% in diwali!

shailesh said...

The largest cities in the world by land area, population and density

Density per square km,

Mumbai 30K
Kolkota 24K
Chennai 14K
Delhi 11K
Banglore 10K

Folks on this board compare US cities regularly to Indian cities. I hear arguments for Mumbai like prices should be compared to Manhattan or NYC as it is financial capital of india. The first US city on the list is at #90, LA with density of only 3K. That is almost 10% of Mumbai's density.

IMO, one should get the hell out of Mumbai. With such high density, you get services which is worst than even 3rd world country for price of 1st world country. People are emotionally attached to Mumbai, otherwise Quality of life is deplorable at the best.

Even though I grew up in Mumbai, I am never going back to live there permanently. I would rather live in Pune or some 2nd tier city comfortably than pay premium to live in 3rd class city.

shailesh said...

Also on above topic, most argument is that India has 1/3rd land compared to US. Well on surface that may be true, but if you look at India just by itself,

Total Land: 2,973,193 sq km
Out which irrigated land: 558,080 sq km

Hence there is at least 2.4 million sq km available land. If you take out mountains and other non-developable parts, you still have 1 million sq km. That should be lot of land for 250 million or so families (assuming 4 people per family).

Anonymous said...

Shailesh,
Your points are valid however many times one cannot plan to leave the city they grow up in due to parents health etc. I too would wish to live in bangalore but for some reason or other it doesn't happen

Desi Batman said...

Every place has it's own charm and likeness. People pay premium to stay in desired location. Now question is what are characteristics of desired location.

1. jobs
2. affordability
3. accessibility to goods and services

Bombay had lots of jobs, it was affordable and had accessibility to goods and service MORE than any other city in India. BUT today is different. Lots of cities are competing shoulder to shoulder with Bombay. Bombay is stinking, crowded, corrupted and land of greedys.

Comparing Bombay to NYC or London is because earnings to affordability. Do you know so many people move out of NYC just because they want to have better lifestyle? Do you know that NYC is powered by financial center powerhouse. Average earnings is more than USD 300K for many executives? Do you know that central park is middle of NYC and will be preserved no matter what?

What does Bombay compare to NYC?

I don't want get started with London. Just read on tubes (subway) in London, do I say more.

Anonymous said...

Average IT salary in Mumbai

http://www.payscale.com/research/IN/City=Mumbai_%28Bombay%29/Salary

Non IT sector, the salary is much less. Average 30-40 K per month gross

It is impossible for a salaried person even think of owning a flat at current prices. Those who buy have definitely have some connection to corruption. Money doesn't grow on trees.

Anonymous said...

500 crs, wow!

I think they are wasting all that money. They should follow the Mantri Developers Bangalore model. If is costs too much to buy the land, just fake the documents:
http://www.thehindu.com/news/cities/Bangalore/article509504.ece

Anonymous said...

REf. to:

http://timesofindia.indiatimes.com/india/8-Indian-states-have-more-poor-than-26-poorest-African-nations/articleshow/6158960.cms

So goes the tall claim of GOI's 8% growth. In fact, this state of affairs make one believe that the growth could be negative

Building flats costing crores in a country where millions are starving shows the utter apathy of government. Who needs rocket science when one doesn't get a square meal a day

samix said...

Guys I think that the bubble is bulging at the core's

Today I got a call from a developer for buying property!

Well some of you guys must be thinking what causes me to think that the bubble is bulging if I get a call, well as they say that there is too much demand and too little supply so why the calls ?

funny enough, I have never been to a real estate exhibition, neither to a developers website or construction site or shared my number with anyone remotely associated with the RE industry, which means that there is some desperation that is building up to unload the inventories...

Desi Batman said...

It is very old technique used by manipulative businessmen.

1. Investors will by properties at low prices.
2. Even if there are geniune buyers, the investors will NOT sell the properties and will hold it to create more (artifical) demand.
3. Raise the price to squeeze the most out of real buyers. Sell 1 or 2 flats. Again repeat step #2 to #3
4. This goes on until the bubble goes to the peak 500% or more. Now even if investors/builders sell one flat they have made their profits for 5 flats in reality.
5. Again Repeat #2 to #4.
6. One day bubble will burst and they will say prices have reduced by 30% to 50%. But in reality the prices are still sky high with huge profit margins.

Investors/builders will hardly loose anything. But real (read stupid) buyers who bought at peak will be WASHED OUT.

Desi Batman said...

@ Samix

Wow, that is cold calling for selling crores worth property. It may not be desperation, may be it new business model for marketing/sales.

Everyone in India (shinning aka super power aka IT hub aka bullshit) keeps saying crores worth properties bought and sold like bought biscuit from stores. Where can we get real time information on sale deeds, taxes paid, property history.
In USA they have (just enter the address or zipcode):
http://www.zillow.com/
http://www.trulia.com/

Also one can browse through county websites for detailed information.

samix said...

@desi batman , yeah looks like they are looking for more sheeple to dump their crap load on to..

Anonymous said...

What is breakup of transaction generally when buying property for let's say 80 lakhs?

1. White Rs. ?
2. Black Rs. ?
3. Down payment Rs. (black or white or both)?

How much do bank lend? Based on what?
is it 20 year fixed or 30 year fixed interest?
What are the foreclosure law if someone is unable to pay EMI?

I know how it works in USA but not in India. Thanks.

jai said...

i

rajni sharma said...
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