This year, South and Central Mumbai are expected to witness a fair amount of premium residential projects, as extensive construction activity gets underway for developing condominium style residential colonies that offer state-of-the-art amenities and will be ready for occupation, within the next 12-18 months.
Large four to five bedroom apartments that range between 4,000 - 8,000 sq. ft. (super area) and priced at Rs. 30,000 to Rs. 40,000/sq. ft. (on super area) are already on offer by numerous developers. The interest of end-users and investors alike has been snagged with sops, such as, the promise of staggered payment based on construction stages, including the benefit of relatively lower prices for pre-committing to the project.
However, both south and central Mumbai continue to face a paucity of adequate ready-to-occupy apartments; coupled with a clear demand for 2/3/4 bedroom apartments ranging between a net area of 1,400 sq. ft. to 2,200 sq. ft. A demand-supply mismatch is the main cause of rapid price escalation over the last quarter. Till last year, old, well maintained buildings in prime localities commanded rates that ranged between Rs. 18,000 to Rs. 28,000/sq. ft., however, some of these prime buildings have now begun to command up to over Rs. 30,000 to Rs. 40,000/sq. ft.
Several projects in various stages of construction in suburbs in Mumbai's north, along the Malad - Goregaon - Kandivili belt and Andheri / Powai, are expected to be completed within the next 12 - 24 months, which will lead to stability in prices. However, apartments ready for immediate occupation continue to be in short supply. With considerable commercial activity in northern and north-eastern suburbs, it is anticipated that the demand-supply gap and lack of infrastructure will be a continuing limitation.
With demand far outweighing ready supply, rental values are likely to rise in prime buildings in most parts of Mumbai. However, prices / bookings are expected to slow down for highly priced premium projects under-construction, as the number of prospective purchasers for such high value apartments is limited.
