Mumbai Lease Market Review – September 2011

The lease rent market in Mumbai seems to be luke warm, of course the transactions are happening, but the supply definitely outsrips the demand in today’s day and time. The primary reason for this down turn in the rental market is attributed to the latest trend in the Corporate world of downsizing and also hiring domestic employees rather than appointing expatriates which usually cost the companies a lot more than the Indian Counterparts.

The demand is most in the locations which are close to the CBD’s and also locations which have good quality stock in the market. A lot of home seekers who are looking for lease options are looking at options to buy as well as they feel that the property rates will increase over a period of time and hence people who have taken a decision to reside in Mumbai for a long run have converted themselves from a lease to their own home buying.

The general perception among home seekers is that the leasing pricing have fallen and they will continue to fall further in locations where there is a lot of stock coming up.

There is a lot of supply coming up in western suburbs and Executives/Expatrites who are looking for homes of 2/3 are getting pampered with the new blocks like Oberoi Woods, Rustomjee Ozone and a lot of new properties in Lake Homes and Nahar Amrit Shakti in Powai. Bandra West and Juhu seems still a hot favourite for Expatriates. The high end buildings in Bandra like Shimira, Narain Terraces, Kubilisque, Chand Terraces, Raheja Bay View, Raheja Sun Kist, Jivesh Terraces, Vastu, Quantum Park, Kismat, Zodiac have stocks available for apartments over 3000 sq.ft and priced above 6 Lacs per month. Juhu suddenly has an over supply and most of the apartments which were available in the range of Rs.300,000 are now being leased at around Rs.225,000/-

Juhu has been the most hit in the past few months, although the quality of apartments is much higher than even compared to Bandra West. In Hiranandani Gardens, the only 2 buildings where rates have been consistent are Tivoli and Evita. In odyssey II where last year the transactions were done at 250000, the new rates established is 135000 per month which is nearly a dip of 45%. In Powai, there is a huge oversupply considering a lot of Buildings are added up and apartments available on lease in all ranges.