Churchgate Sees Fall In Rental Values
Rental values of residential properties in Churchgate have fallen from Rs. 1.75 lakhs to Rs. 1 lakh per month. This fall comes after the area witnessed nearly a rise of 32% in residential property values from April to September 2013.
Reasons for fall in rental values
Churchgate is a prime area in South Mumbai, the commercial centre of Mumbai. It is now witnessing a dwindling demand for rental accommodation. The fall is however not sudden. There are a few reasons why the locality is seeing falling demand.
1) Mumbai is seeing new central business districts (CBDs) cropping up everywhere. The commercial base in Mumbai has moved from Nariman point to other locations such as Bandra Kurla Complex (BKC). This shift has a major impact on the rental values in localities around Nariman Point. Earlier, people who worked in Nariman Point preferred to stay in Churchgate due to its proximity. Now, since the commercial centres have moved, the working population too has started moving to areas such as Bandra and Parel.
2) Churchgate and few other localities in South Mumbai are dominated by commercial centres and hence, it is difficult to come up with new residential projects there., while areas such as Bandra have a higher availability of projects available for rent. The limited supply of properties too has led to the migration of people from Churchgate.
With the fall in demand for residential properties, the rental values too have gone down in Churchgate. A 1,000 sq.ft, 2BHK apartment which was rented out for Rs. 1.75 lakh per month almost an year ago, is now available for Rs. 1-1.2 lakh per month. A 3BHK apartment which had a rental value of Rs. 2.5 lakh per month about 6-7 months ago, is now available for Rs. 2.10 lakh per month.
Other areas that are witnessing a fall in rental value in Mumbai include Malabar Hill and Cuffe Parade, all which are in the proximity of Nariman Point.
What this implies
One inference that can be drawn from the situation is that, with eroding working population, the demand in these areas are taking a hit. With low demand, there may be a possibility in the fall in property prices. However, with the rental values increasing in suburbs such as Parel, the demand for rental housing in Churchgate may be back eventually. Moreover, Churchgate is just about half an hour from CBDs like BKC by train. Hence, people may continue to stay in Churchgate and save on rentals compared to suburbs such as Parel.
