RESEARCH DESK:

PROPETY PRICES IN MUMBAI (BOMBAY) IS SET TO CRASH AGAIN: GOOD NEWS FOR NEW HOME BUYERS:

There are some good news for the new home buyers, especially in Mumbai (Bombay) and its suburbs: The price of real estate holdings are expected to crash again after it rose around 25--30% in the last 6 months time frame....

The unusual rise in property prices in Mumbai (Bombay) has already left the real investors high and dry, leaving the property market in the hands of punters and gamblers, which is not a good sign for its long term growth.

Moreover, the proposed new FDI norms which is set to increase the lock in period from 3 to 5 years is also expected to be negative for the large projects.
Besides, the interest rate on home loan is also set to rise in the long time, giving less opportunities to the real investors and pensioners.

Meanwhile, the government is also thinking of tightening of accounting norms so as to curb humongous amounts of black money in the sector. According to some sources, a large amount of ill-got (or hot) money has entered into the real estate sector, in the form of FDI, which is pushing the property prices to some un-thinkable levels.

Besides, the gap between the government’s rates of properties and private rates is increasing day by day, which points towards a crash in the near future. For example, I am told by some sources, who refused to be named that in some areas of Andheri (Bombay), the rates of government properties are less than Rs.4000 per sq.ft, which is half or one third, the real rates.  

Also, the brokers’ (Now they have a very good nomenclature, “Estate Agents”) greed to sell properties at a higher prices or at unusual rates is also harmful for the property market.

Over and above this, home owners giving out unusual rates when asked about their property prices, is also a matter a concern.
For example normally, if a home owner in Ghatkoper is asked about the rate, he might say, Rs.12000 per sq.ft in posh areas, whereas the real rates are not more than Rs.7000—8000 (which implies, it may be less also) even in high society areas in Ghatkoper, according to my survey. Similarly in Andheri where the rates are normally between, Rs.8000—Rs.11000 per sq.ft (may be a little higher in Lokhandwala Complex), some too smart property owners might say, Rs.20, 000 per sq.ft.
Hence never ask any property or apartment owner if you want to buy any property—most of them (especially in Mumbai) will simply fool you and you would be left confused.
Tell the brokers about your budget price and sit idle....they will search for you for their own benefits.

A recent survey showed that the properties prices in some places in Bombay (Mumbai) are already over valued by high delta or by miles, as compared to the international standards.

Another factor which needs attention is that Mumbai is fast becoming a depleted city, with water and food problems and also jobs shifting to Chennai, Hyderabad, Kolkata, Noida, Delhi, etc. Kolkata is fast becoming a great business hub in the eastern region and hence those who want to get quick return should invest in Kolkata and its suburbs.
In many places in Bombay water is a scarce quanty...and in the greater Mumbai (Including Thane District), better not talk of the Power (Electricty) Problems.
I am told: even in Pali Hill (Bandra) or Bandstand (Bandra) people need to store water when BMC cuts supply, which is unheard of in posh areas of Kolkata or Guwahati or in small towns like Dibrugarh, Siliguri, etc.

Hence, according to my estimate, those who want to buy properties in Mumbai and its suburbs should postpone their decisions for at least some months to get good rates. The property prices are going to fall in the near future because the prices are going above the normal affordable rates, which is not expected to sustain for long.....those who have properties are suggested to sell them to prospective buyers before the prices SINKS (or nosedives) again. They can invest the money in Kolkata, Pune, Mohali (Punjab), Chennai, Guwahati, etc, which are fast becoming new hubs, with better quality of living at an affordable price tag....