Mumbai Property Prices: Up, Up and Away

By: George Gonigal

Rising prices of Mumbai's real estate has always made news. This week politician and actor Vinod Khanna bought the country's most expensive 3-bedroom flat in Mumbai's Little Gibbs Road on Malabar Hills. This luxurious flat in Il Palazzo cost him Rs 30 crore.

Earlier, in January this year a property analysis had suggested that rental values in Bandra-Kurla complex and capital values for commercial property are highest for Nariman Point. These property hotspots were ranked in the top ten list of global order.

Sample this, capital rates for residential segment in Marine Drive ranges between Rs 12,000-20,000 per sq ft. Even the suburban areas like Jogeshwari, Malad and Borivali command property price of Rs 4,800-6,500 per sq ft for residential segment. This is by far the highest property rate all over India. Property prices in Delhi's posh areas like Model Town, Jor Bagh range of Rs 8,250 - 11,000 per sq ft.

One major reason for Mumbai's rising real-estate prices is that the city has acute space crisis. The city is linear in dimensions and tapers towards the sea. Thus, there is hardly any scope of expansion. The city can only stretch its borders in north and north-west, where Mumbai's extensions like Navi Mumbai have already taken shape. Other cities like Delhi, Bangalore are blessed in this regard since these cities can stretch their borders in all radial directions. Also, Mumbai is the country's financial capital. Hence all commercial establishments need a foot-hold in Mumbai. Hence, Nariman Point is one of the most expensive commercial locations in the world.

The capital value for posh commercial localities like Nariman Point, Churchgate and Prabha Devi range between Rs 10,000-20,000 per sq ft. In the rest of the city, commercial property commands values between Rs 3,500-5,000 per sq ft. The lease rates for commercial property in Grade A space (like Bandra West, Ballard Estate, Lower Parel) comes between Rs 200-350 per sq ft.

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