Mumbai's Real Estate Market is Still Red Hot

Bangalore: One of the most expensive cities, Mumbai is the financial hub of India, where the real estate prices are still heading north. Although Mumbai has witnessed slump in home sales and high margin of unsold inventories, yet the city is soaring in demand for real estate, reports Moneycontrol.

Lately, in South Mumbai, a 28^th floor apartment was sold for a record price of 39 crore i.e. $6.8 million, highlighting the real estate market scenario of the city where property pieces remain high even in sluggish economy and fluctuating currency value. Also, the city’s real estate prices are in stiff competition with other Asian markets like Singapore and Hong Kong.

Anuj Puri, Country Head (India) at real estate services firm Jones Lang LaSalle, stated that the property prices in Mumbai will remain stubbornly high and believes that the price will not decline in near future.

In Mumbai, property prices shot upto 17 percent in the first quarter of 2012, according to industry estimation. With the inflexible lease market and the regulatory hurdles as well as lack of supply in new launches lead to the spiraling property prices of the city. 

Rajesh Jogani, a Mumbai-based property investor, said that "Apartments are not easily available for rent in Mumbai to individuals, as owners prefer to lease only to corporates, therefore people look to buy a house."

However, high mortgage rates between 10 percent to 12 percent have put buyers into cash crunch situation, leading to plunge in volumes. Over the past one year, home sales in Mumbai fell over 40 percent, according to industry estimation.