Mumbai property prices are plain crazy! Even the unsold flats costs over a crore

Property prices in most of India’s metro cities have gone crazy. Mumbai, being the financial hub of the country, is also the most expensive when it comes to property prices. If you are planning to invest in the real estate segment in Mumbai, remember that more than a-third of the unsold housing inventory is priced above Rs 1 crore.

Out of a total 44,032 units there are about 33,500 residential apartments in this category. A recent study conducted by Jones Lang LaSalle(JLL) shows that about 83% of the housing units launched in the second quarter this year are priced above a crore.

"The need of the hour is to reduce the size of apartments and undertake value engineering of construction cost to ensure more home buyers can afford houses in Mumbai," said Ramesh Nair, COO & International Director, JLL India.

If you have noticed, the developers to ease the price have reduced the average unit size. The reduction in average unit sizes has been the highest in in the city at 26.4 % in the past five years. The average unit sizes in Mumbai have been the lowest among Indian cities.
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Development charges and premiums to be paid to the civic authorities form 30-35 % of the project cost and these premiums have increased over 300% in the past three years.

With land prices and development premiums that continue to move higher, proportion of houses priced above this price range are expected to go up marginally in the near term launches.

However, experts are of view that even the government needs to review the scenario and consider measures to ease the pressure.

Now the experts opine that apart from reducing taxes, government needs to improve infrastructure and connectivity. Also creating more growth corridors with economic activity will encourage, and not force, people to reside in suburban locations too. Moreover, during the launches in the second quarter, only 3.21 % of the apart Rs 31-65-lakh ticket ments are in the size and none under the Rs 30-lakh bracket in Mumbai.