Buying real estate in Mumbai......understand the trends first.
Is real estate becoming an asset bubble?
Published: Tuesday, Oct 12, 2010, 22:44 IST
Place: Mumbai | Agency: DNA
Prakash Shah: I don’t see the asset bubble at all. The downtown and mid-town areas will cater generally to the more affluent. The suburbs are for the middle class. But there is no land available due to the peculiar features of being an island city. Thus land is very limited in downtown areas. There is more land available in mid-town areas, so there could be some correction in Mumbai’s mid-town areas.
DNA: So a correction in mid-town areas could happen?
Prakash Shah: Mid-town means areas like Lower Parel. I don't see a price correction happening in distant suburbs like Thane where the price is about Rs8,000. That is affordable middle-class housing. That’s a place where land availability is still possible. Enquires and business are going on. There is reasonable demand and supply. Not at the same levels as in 2008, buta reasonable demand-supply position is there. And Rs7,000-8,000 is an affordable rate in Mumbai. Maybe in other cities I understand Rs3,000-4,000 is an affordable rate, but Mumbai has a peculiar way of thinking. Compare the prices of Central suburbs, which are around Rs8,000 a sq ft, with those of Western suburbs like Borivli-Kandivli where prices are around Rs10,000-11,000 sq ft. These differences will remain.
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