Mumbai is the financial capital of India. A city with a burgeoning population of 1.2 million and a paucity of land. This makes this island city a dream for a builder. As price is directly related to supply and demand the rate of growth of real estate in Mumbai far outstrips the national average.
Housing in Mumbai is thus at a premium and the prices will rival those of real estate in bigger places like New york. The sad commentary on all this is that the per capita income of the average Indian is pretty low and thus most property onsale in Mumbai is out of reach for 95% of the Indian population.
Prices in prime areas like Malabar hill are upwards of Rs 60,000 per square foot and out of reach for all except the ultra rich, who thanks to the large Indian population are there in sufficient numbers. The prominent builders of Mumbai like Lodha and Hiranandani charge a high premium for their constructions. Most of these prices are manipulated by the builders in collaboration with the political leadership, resulting in prices touching the sky.
In addition most builders in Mumbai do not lower their rates even if there is recession in the market. Thus during the recent recession in real estate while prices all over India crashed, but not so in Mumbaiwhere the depreciation was minimal due to the strong builder lobby.
Prices of real estate and housing have been on the upswing in Mumbai and even the distant suburbs and outlying areas like Panvel and Kharghar have seen prices going up at an alarming rate. In fact the recent township announced by Hiranandani at Panvel is almost 4000 per square foot. To think that this place is about 12 kilometers from Panvel itself. Yet buyers are available as the other builders like Lodha markets his property at Panvel at almost 4500 per sq foot.
What is the solution. There appears to be none as the builder lobby has a close nexus with the political class and that makes for a heady cocktail. The common man be dammed - he can always stay in the slums that so abound in Mumbai.
With lodha builders now building the tallest residential tower in the world, the stage is set for a further price rise in the city. But Lodha certainly needs to be complimented for this, as it will be a project that will enhance national prestige and bring Mumbai firmly on the world map. Let us hope that that at some stage the prices will stabilize, but that appears a distant dream