The real estate prices of properties in Mumbai never ceases to create a stir among the people interested in real estate investments. From the selling of eye-catching and expensive stellar properties in South Mumbai to the ever-increasing affordability gap for middle-class income group seeking for a home, the city’s residential real estate market is under constant jeopardy and limelight. However, what are the factors that has been the constant drivers in keeping Mumbai’s real estate prices so high over the years? To understand this issue, one needs to examine it from the basic primary real estate concepts of demand and supply.
Here are some reasons why the real estate prices in Mumbai are so steep:
1. Geography: The geographical location of Mumbai is one of the most important factors responsible for the steep contrast in real estate prices. As the city is surrounded by water on three sides; Mumbai has never had the opportunity of circular development like most other Indian metros. Mumbai always has seen linear development and the cost of transportation isone of the main factors of rise in prices.
2. Government Policies: Ready reckoner rates and government policies related to it can also be seen as one of the responsible factors. For example, in the past few years from 2013-2015, the Maharashtra government has been steadily hiking the ready reckoner rates by 15-20% across the city. This is a very important increase for a city whose prices are already on a very steep high – and in comparison to the rates in other major cities, the increase was relatively moderate.
3. Population Pressure: Mumbai is a hub for immigrants from all over the cry because of rapid development and high employment opportunities, coupled with the rapid urbanisation. Mumbai’s population has seen a rise of 983% since 1911, according to census 2011. In comparison to the rest of the country, this rise is a whopping 380%.
4. Locked Lands: A very big chunk of Mumbai’s extremely prime location is currently locked in slums and buildings which are very nearly in ruins. This land needs to be rescued by offering lucrative incentives to interested developers. However, the renewed offers by the state government to rehabilitate dwellers dwelling in such homes to be removed in the prime locations of the city have met with very limited success.
5. Infrastructure: Unfortunate but the slow progress on infrastructure has been the reason for the city authorities to open up new land areas for development. Projects such as the Mumbai Trans-Harbour Link (MTHL), coastal road network, the New Mumbai international airport, and thedifferent stages of the proposed Metro links, etc. have made very slow progress. This slow progress of the major projects has once again failed to strongest the city.
To conclude, if spoken in a nutshell, huge demand from Mumbai’s local inhabitants is always on the highand this shows up and reflects on property prices. Therefore, the price of a property in Mumbai is higher than any other metros in India