MUMBAI property market is booming. There seems to be a sudden spurt, especially in the residential segment. There are couple of reasons for that:
1. Shortage of A-grade quality property is pushing people to look towards the re-sale market, where there is activity as many are relocating to different locations for want of bigger apartments
2. Investors, who were waiting for the markets to climb back up, are also seen exiting the markets and booking profits to invest in new projects
Mumbai is emerging as an important city in South-East Asia, and development is bound to happen over the course of years. So, it is unlikely that the property rates will come down drastically unless the Government does some major policy change in the Floor Space Index, Coastal Regulation Zone and SRA laws all across the city.
Hot areas!
The market has already seen a price escalation from 5 to 15 per cent across Mumbai. Property price movement has been increasing between Bandra and Borivali areas.
Sale of properties in places like Thane and Navi Mumbai, which have large supply, will also pick up by Diwali. Virar, Kharghar, Kamothe, Mira Road and Vasai haven’t missed the lime light with builders regaining ground with a lot of transactions.
That’s good news, but is this price movement for real?
Also read: Buy property only 2 years' after prices crash
Will the bubble burst?
This time around the real estate market seems to be driven by actual user demand. This is due to renewed confidence in the economy, stock market and the sops given by the Government in the low budget section with interest rates at around 8 per cent.
However, where’s the demand coming from? Corporate executives, business families and investors, who have leased out their properties in the past, are looking for ready construction homes or buildings which are nearing completion. (Tool: Check out property prices in your city)
Where’s the opportunity?
The re-sale market seems promising. However, there are some challenges for both buyers and sellers:
Challenge 1: The seller not having a clear title,
Challenge 2: The seller not having completed 3 years for the Capital Gains and planning to sell
Further more, for those of you who are seeking loans in this market, here's a tip: Get a pre-sanction letter with your bank before you step out to buy. This will ensure that you have all legal clearances ready when the opportunity to buy is ripe.
To summarise: Move fast and make the best of the present market. After Navratri, the markets should be back in full throttle, which means you can gear up to maximize on profits, change your homes, location, get a bigger apartment or sell your existing one and get the capital etc.
Also read: First home buyer's guide
Illustration: Vaibhav Shirke
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