Will Mumbai’s Real Estate Market be heading for another big crash?

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While a lot of people may search on Google “Real Estate Market Crash in Mumbai” or Rate Reduction of Properties. Property Prices going down, Mumbai’s Real Estate Market rates in 2019 and numerous other searches. The truth in this situation however is unknown and extremely speculative.

We do understand that there is stress in the Indian Economy in regards to Mumbai’s Real Estate Market heading for a big crash.

The Indian Government is doing a lot to improve the sentiment in regards to the public. As mentioned the property market with its ups and downs is unprecedented and mostly involves guess work until the worst case scenario actually happens.

Signs of lesser than expected growth are more likely to stand rather than a heavy crash. Mumbai’s real estate market is still witnessing a pretty high demand from various sections of society. Prices of 2 BHK flats in Andheri West are still holding strong. Mostly micro markets with a lot of flats to sell by Investors and Developers in Mumbai have some stress. The pressure to exit is on both the homeowner and the builder.

Prices of 2 BHK flats in Andheri West are still holding strong. Mostly micro markets with a lot of flats to sell by Investors and Developers in Mumbai have some stress. The pressure to exit is on both the homeowner and the builder.

Mumbai being the financial capital of the country has a mix of population. This Induces demand and with its consistence the scope for a hard crash reduces in Mumbai’s Real Estate market.

A few factors which could generally cause the property markets to head for a big crash include

  • Supply and Demand

Over supply of land, mass redevelopment of slums or old building. If Mumbai’s Real Estate Market offers Multiple options in buildings, high vacancy rates can lead to reduced capital appreciation. This in turn affects rent prices due to the high availability, low demand and room for negotiation.

  • Inventory

Builders who have a number of ready possession flats in Metros like Mumbai have a surplus of leftover inventory. This pressures them to higher cost of debts selling the flats at lower prices to cut their losses.

  • Infrastructure

Locations around Mumbai like Thane and Navi Mumbai become more affordable due to their local economy. Perhaps a better infrastructure which reduces the time taken to reach from one location to another. Example, if by Metro in air-conditioned comfort a person can reach Thane from BKC at ease. He would prefer to buy a property there creating a gap in the Western Suburbs affecting Mumbai’s Real Estate Market.

  • Economic conditions

Fall in Land acquisition costs due to economic conditions of the area, job availability, availability of loans from banks and the neighborhood itself can also lead to Mumbai’s Real Estate Market heading for a big crash

  • Taxes

Government policies leading to increased taxes on available/vacant properties reduces the flow of Mumbai’s Real Estate Market

  • Shifting Mindset

A shifting mindset towards Rent culture, flatmates and co-housing. The desire for high standards of living and low property EMI allowing for cheaper prices and living. Youths prefer living a more comfortable life rather than under the burden of a 30 year EMI.

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