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Pravin Palande
I look at markets as numbers because numbers don't lie

Mumbai real estate prices are down! Not.

Man cycles past residential buildings under construction in Kolkata

Image Courtesy: REUTERS/Rupak De Chowdhuri

According to the Economic Times the real estate market has corrected by 30 percent.

Is that good enough reason for you to run to the nearest home loan bank, wave your monthly salary slip at them and ask for a loan? After all, only last year one of your friends bought a 2-BHK flat in Borivli (Mumbai) for ₹2.2 crore, and if the Economic Times is right, something similar would cost you around ₹1.5 crore now. Perhaps you should pause before lacing up your running shoes.

Ashutosh Limaye, who handles research at JLL India, a real estate consulting firm, agrees that there are pockets where you will find that prices have fallen, but calling it a huge correction is going too far. He says, “If there is a correction then it should be across the board for everyone without asking for any discounts. There should be no connection with the developer and no cash transactions. Even if one aspect is missing out of these three parameters, I will consider this as a deal-specific discount.”

For instance, developers are ready to give you discounts where the structures are still being built, but getting one in a completed project is extremely difficult. Though the same is not true for buildings that are old: Extremely crowded areas in Mumbai like Borivli, Dadar or Ghatkopar have seen some minor price falls over the quarter ended March 2014. According to MagicBricks.com, rates in Ghatkopar west are down by 5.4 percent.

Limaye says that this data is based on secondary market sales, where the rationale for selling is not easy to understand. “The seller here sells on reference rates and sentiments, unlike the rates of new projects. When we look at changes in prices, we always go with new projects and primary rates.”

We looked at the data for Mumbai to understand if there was any genuine fall in real estate prices. The big picture? To our surprise, prices in most cases have only gone up. There has been a jump of around 2 to 4 percent in areas closer to Chembur and Kanjurmarg, thanks to improved connectivity with south Mumbai, the Bandra-Kurla Complex and the western suburbs.

One of the surest bellwethers for real estate prices in Mumbai is Lower Parel. Over the last quarter, prices haven’t dropped. In fact they’ve moved up by 7 percent.

Navin Kumar, Executive Director, Milestone Capital Advisors, says “If there is a big correction, then there has to be consumption. Buyers will always rush in immediately if there is a correction. Since there is no data on increased consumption, I don’t see this as a correction.”

Real estate investment is generally for the longer term. Investors typically wait for at least three years before they see serious returns. So we looked at data for three years on MagicBricks.com. Interestingly, since December 2010, the real estate prices in some areas of Mumbai are up by 33 percent or 10 percent annually for the last three years.

Mumbai Area Jan-Mar 2014 Oct-Dec 2013 Oct-Dec 2010 Q-o-Q return (%) CAGR (%) 3-year return (%)
Altamount Road 75152 - 54419 - 10 38
Andheri West 21724 21253 15162 2 12 43
Borivali West 14613 - 11551 - 8 27
Dadar West 31178 31493 25266 -1 7 23
Ghatkopar East 15231 16107 11549 -5 9 32
Kanjurmarg East 14809 14290 - 4 - -
Powai 19851 19743 15623 1 8 27
Chembur 17118 16556 11992 3 12 43
Bandra West 43436 43438 30046 0 12 45
Lower Parel 34238 31978 27031 7 8 27
₹/sq foot

Source MagicBricks.com

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I am sorry to saymost real estate news is not real but manipulated,and that includes the so called international property consultants.You now where their interest lies.But the fact is mumbai real estate is down and out.,however you may try to boost it artifically.People just cannot afford the outlandish rates in a city with such poor infrastructure.the day this dawns on these "consultants"will be good .
i visit your blog. u come to visit my website http://rightandbrightmyanmar.com
Paid article. That too highly based on highly dubious "Magicbricks" rate. Funny article on behalf of buiders lobby.
I used to visit all over mumbai, The buildings those are Ready from last 2-3 years, are still all vacant. Go any corner of Mumbai western,central thane, vashi,every where new buildings are not occupied. Night time it is clearly seen only one or two room lights are Glowing., On enquiry found the security or Building contractor are staying there. so many construction works are halted. Let us hope from Modi Govt. to break the barrier...People will prefer to stay at New 100 cities.
To be very frank.... I personally went everywhere ... on ghodbander road.... no buyer....flats are empty.... investors are not coming out... market must fall to correct......
If priceis up by 33% then y mumbai is second in uncleared inventory. Also who is buying in Mumbai.... fact is there are no genuine buyers ...HNIs are taking advantage and booking in bulk... i think they will sale each other to book profit :)
Recently , I had enquired resale and new properties in northern suburbs surprisingly the gap ,between resale and new properties is huge ( approx 20 - 30%) ,this is new a phenomenon , in my view is a indication of impending correction .
Exactly wait n watch is better stand rather than burning hand in unrealistic real estate....one real eastate agent told me there was long queue since early morning 5:30 am to book flat in mulund at one of project recently launched. And he made 50laks in commission i replied wow that should have been headline on all news hungry channels. I am bit suspicious abt media also as real news is not coming out...
 
 
Pravin Palande
The financial markets generate a lot of number on a per second basis. There are people who have made it a profession to convert this information into trends, buy-sell signals, charts and pivot tables. Over the last 18 years of financial journalism, I have realised that every number has a story to tell. And these numbers as a trend normally never lie. Im forever looking for these trends.
 
 
 
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June 28, 2014 13:53 pm by Satish nikam
I am sorry to saymost real estate news is not real but manipulated,and that includes the so called international property consultants.You now where their interest lies.But the fact is mumbai real estate is down and out.,however you may try to boost it artifically.People just cannot afford the outlan...
June 17, 2014 15:52 pm by chan aye
i visit your blog. u come to visit my website http://rightandbrightmyanmar.com
June 05, 2014 19:31 pm by Raja
Paid article. That too highly based on highly dubious "Magicbricks" rate. Funny article on behalf of buiders lobby.
May 29, 2014 16:28 pm by Dilip
I used to visit all over mumbai, The buildings those are Ready from last 2-3 years, are still all vacant. Go any corner of Mumbai western,central thane, vashi,every where new buildings are not occupied. Night time it is clearly seen only one or two room lights are Glowing., On enquiry found the sec...
May 12, 2014 10:09 am by devendra
To be very frank.... I personally went everywhere ... on ghodbander road.... no buyer....flats are empty.... investors are not coming out... market must fall to correct......