Thane Loses Sheen as an Investment Option

As Mumbai real estate market prices started growing dearer, Thane emerged as a favourite real estate destination among property buyers due to its proximity to Mumbai, its growth prospects and affordability factor. However, Thane is now slowly losing its past glory, especially among property investors.

Thane losing its past glory

Thane was once considered one of the most dynamic real estate markets in the Mumbai Metropolitan Region (MMR). The sub-city is centrally located to Bhiwandi, Mira Bhayander, harbour line suburbs, Kalyan-Dombivali and Navi Mumbai. However, it was noticed in 2013 that Thane has lost its past glory. The suburb enjoyed great attention from real estate players only till 2011-12. Though there are new launches happening in Thane, the absorption rate has taken a hit, with almost 90% decline. The sub-city has been witnessing a situation of oversupply since the past 18 months. A research by Commonfloor shows a consequential year-on-year decline of 84% in new launch units.

Thane not a good option for investors

Apart from the new project launches happening here, the Supreme Court recently gave a verdict to clear homes on forest land. This brought in an additional supply of almost 10,000 flats that are either under construction or ready-to-occupy. Several property consultants are of the opinion that the present market situation has made Thane a good option for end-users and first time buyers but not a very good option for investors who look for returns of over 20% in the present market conditions.

However, there are yet another set of real estate experts who opine that though one may not be able to witness returns beyond 20%, investors can still look for good returns in certain localities in Thane, by keeping the basics right. This includes areas with good connectivity, availability of good transport and a growing civic and social infrastructure. Many consultants have an opinion that following these basics can still give annual returns of up to 15%.

Having said this, with a situation of oversupply and falling absorption rates due to rising property prices, Thane seems to be losing its past glory as an attractive real estate market.