Behaviour Of South Bombay Real Estate In Recession


wealthymatters

The residential real estate market in South Bombay has undergone a change in the past three years. Earlier, the South Bombay market was predominantly a resale property market, but now there is a lot of new supply coming in. This has led to a pile-up of inventory.

Napean Sea Road, which boasts of some of the most expensive apartments in India, has premium projects by Rohan Lifescapes, Lodha and Orbit Developers.About 25% of apartments in these new projects remain unsold.

Similarly,all the newer projects in South Bombay are in the ultra-luxury segment and it’s difficult to find buyers for these higher configuration and big-ticket homes in the current market,

So sale of new property has dropped 30% in the past eight to 12 months. For every 100 homes available for sale in a quarter, only six are getting sold.

Also, investors who might have booked at a lower rate during prelaunch are looking at selling at double the prices, but are not getting buyers.

Property appreciation in Sobo, as the area is fondly called, has dropped to 10% from 30% two years ago. Rental yields, too, have come down from 3-5% in 2008-11 to 1-2% in 2011-13.

As  now, the rental yields in south Mumbai are  below 3%  it makes little sense for many investors to come in now so round 80% of south Mumbai investors are looking at eastern and western areas of the city for better returns.

About Keerthika Singaravel
Engineer,Investor,Businessperson

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