Why is Mumbai Losing Its Attraction To Realty Investors?
Mumbai was one of the top real estate destinations in India. Its nearest competitor was Delhi and sometimes the Island City would edge past the National Capital by a large margin. However, according t...
Mumbai was one of the top real estate destinations in India. Its nearest competitor was Delhi and sometimes the Island City would edge past the National Capital by a large margin. However, according to the recent list drawn up for top cities in India to invest in, Mumbai has slipped to the eighth position, out of the top 15 cities!
The top five reasons why Houses Apartments for sale in Mumbai have lost attraction for investors are discussed below:
Undoubtedly, real estate in Mumbai is very expensive and only the rich can afford to buy property here. The average rate per square feet in the city is Rs 12,000, which is much more than what is asked for in cities like Bangalore and Pune. There are almost 1 lakh flats ready for possession in Mumbai and its satellite areas like Navi Mumbai and Thane which have not found any takers. Developers in Mumbai are buckling under increasing costs of construction, debt and low sales.
Mumbai is a matured real estate market where prices seldom increase by leaps and bounds. Therefore, those looking to invest for capital gains find the prospect less appealing. The difference between resale flats and new flats in the city is only 5 percent. Therefore, the amount that you spend to acquire Houses Apartments for sale in Mumbai may be very difficult to be recovered upon selling. Therefore, investors usually shun Mumbai in favour of Pune, which has a lot of land parcels favourably located that can be developed. If invested correctly, a buyer stands to make a profit of 100 percent on these properties.
The only reason why investors would park their money in Houses Apartments for sale in Mumbai is rental returns. Compared to other cities, the rental returns in most areas of Mumbai are very high. However, letting out properties has its own share of inconveniences such as background checks and unreliable tenants hence many second home owners keep their units under lock and key.
Being an older city, Mumbai does not have wide roads, adequate water supply or solid waste management to support burgeoning populations. The city is famous for its traffic snarls and much of the populace has to rely in local trains for travelling long distances. Several flyovers and elevated expressways have been constructed for decongesting roads, but they are far from adequate.
The availability of open spaces in Mumbai is limited hence families with kids who want a holistic development of their kids do not prefer living here. They would rather live in Thane or Navi Mumbai which has planned neighbourhoods that take care of needs of families. Most families would brave the long commutes for good quality of life.
Several other cities such as Bangalore, Gurgaon, Pune, Chennai and Hyderabad have stolen a march over Mumbai with their adoption of new age technologies, city planning and attractiveness to foreign investors. Investors can park low amounts in these properties and fetch much more.
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Author is real estate consultant and have knowledge in this industry.