Are the real estate prices in Mumbai overpriced?

Q: Is there a chance that the prices will come down in the near future?

khushisha, Mumbai

19th August 2015

Real estate News in Mumbai

property rates in mumbai

tdr rates

high property rates in mumbai

real estate prices in mumbai

dcr 2034

Follow Discussion

Also see discussions for

Mumbai Real estate News Real estate News in Mumbai

Replies (2)

Right Kishore,
If DCR 2034 applied then a builder will have to pay more to the BMC than the tenants of a building. As a result, the excess FSI that a builder would get would be used to cover the increase in cost due to this price increase. Base FSI will be 1.5, if allowable FSI is 8, most of the other 6.5 FSI has to be bought from the BMC at the new premium rate. As a result builder will get no advantage and if they would not get any advantages then no way he can pass on any benefit to the buyer.

Dharmaja Patel, Mumbai

19th August 2015

Comment

But still i believe that there is a huge price correction in the years to come. This price increase has been going up for a decade and this cycle has put housing market completely out of reach of most buyers. i think Mumbaikers are following the US, a lot of people there bought houses only for gaining profit rather than for end use.

Upendra Limaye, Pune

19th August 2015

This is not a new fact. Prices in Mumbai have been unaffordable for years now. Then how are builders building new and expensive flats. Who is buying then?

Simple answer, in Mumbai the developers have an unusual talent to control supply if they feels prices are being knocked down. The stop construction activity till a time they get a price that they want. Inventory lies either in finished format or under construction. And this work well when there is a larger group of builders who can not control supply Vs those who sell at lower prices

Shalini Parikh, Mumbai

19th August 2015

Hello Khushisha,
The prices will not fall at least in the near future. if you have seen the proposed payment in the DCR 2034 to the BMC, you would see that TDR payment has gone up for builders. Previously it was based on the RR rate of 2008. Now the govt. has announced it should be 60% of RR 2015. This itself increased the project cost by crores. Now according to 2034 DCR, the rates are to be 70-100% of RR of the present year. This will lead the developers to increase the flat cost.

Kishore Pathak, Mumbai

19th August 2015

Comment

Yes, it is over prices and no, prices ar not coming down. Mumbai's geographical location is enough to tell you why prices are always on the higher side. Even if people buy flats for price appreciation, many of them are rented to folks coming here for jobs. There is a scarcity of houses. You will see usual 3-5% correction and builders are ready to hold inventory for unusually long times because there are buyers for it.

Shalini Parikh, Mumbai

19th August 2015