Are the sharp annual increases in Mumbai’s property prices a thing of the past?
According to data released by realty consultancy firm JLL, average residential property prices in Mumbai and its suburbs have seen an appreciation of 3.3 per cent (year-on-year) in 2015 compared to 7 per cent in 2014.
Things might get a little better (for property owners) this year. Jones Lang LaSalle (JLL) has forecast an increase of 6 per cent in 2016.
“While a price rise of 6-7 per cent was predicted for 2015, the actual increase should come as a pleasant surprise to homebuyers. It demonstrates Mumbai’s maturing residential real estate market. This is definitely good news for the scores of end-users who wish to own a house in the city that has India’s priciest real estate,” said JLL.
At the sub-market level, south-central Mumbai and the eastern suburbs saw the maximum appreciation at 4.3 per cent and 4 per cent respectively, followed by north Mumbai and western suburbs at 3.9 per cent and3.5 per cent respectively.
Outside the city and suburbs, Thane saw a 3 per cent appreciation in capital values, while the figure for Navi Mumbai stood at 6 per cent. This, however, does not mean Navi Mumbai is doing better than Mumbai as there is a lot of unsold inventory in many pockets there, said JLL.
The 2015 figure also reflects how developers have shown unprecedented flexibility and kept costs stable by absorbing some of the increased holding costs, said JLL.
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Smaller units are in demand lately due to their relatively affordable ticket sizes, and many builders are now offering them even in premium locations. Given the rather sluggish demand for larger homes due to unaffordability, the headroom for price appreciation in this category has reduced, said JLL.