EVEN as Mumbai’s real estate market witnessed a general slowdown in the construction industry in 2015, there was a steady shift of housing and office stock towards the eastern suburbs.
Official statistics shows that the eastern suburbs and peripheral areas,traditionally seen as the poorer cousins of the more plush island city and western suburbs, were the favoured locations to set up homes and offices this year.
Records show that while median property prices in some of Mumbai’s more “prestigious” pockets in the island city and western suburbs hardly budged, several pockets in the eastern suburbs jumped by at least 20-25 per cent. Mumbai is touted as the country’s most expensive real estate market. “The data indicates the movement of people within the city in search of affordable homes and office spaces,’’ a senior government official said.
Sources said availability of large contiguous land parcels in the eastern suburbs, cheaper property values, and improved supporting infrastructure were the major factors that shaped this trend. Connectivity to the eastern suburbs has improved with the Maharashtra government throwing open the Eastern Freeway, the Metro rail, and the Monorail.
Despite the slowdown, official data shows that property prices appreciated for 70% of the development pockets (value zones) in the eastern suburbs. The data also shows that property transactions recorded in this belt were an average 18% higher than the Ready Reckoner (RR) rates, which are property values determined by the government for stamp duty collected by the government in course of property transactions.
In comparsion, in the island city, property values appreciated in only 108 out of 223 development pockets, which amounts to roughly 48 per cent. The median average property value for a transaction in this belt was just over 7% higher than RR values.
In 2015, the eastern suburbs pipped the suburbs on the west, which had seen intense construction activity over the past seven years. While 65% development pockets in the more developed Bandra-Andheri belt recorded property values higher than RR, the far-off western suburban belt covering areas from Jogeshwari to Dahisar were more active with 69% belts recording appreciation in property values. The property rates in both cases were 12% and 11% higher than RR values in these areas respectively.
The Maharashtra government will come out with revised RR rates for Mumbai and the rest of the state on January 1, 2016. These rates are arrived at on the basis of property transactions recorded in various belts in 2015. The Maharashtra government will hike the RR rates in Mumbai by an average 8-10% in the new year.