How Growth Rates of Luxury Flats in Mumbai Stack up domestically and internationally
Luxury flats in Mumbai rose in value by 1.1 in the first quarter of this year. According to a leading real estate consultancy, Mumbai is the only city in India where real estate has provided capital appreciation. While luxury properties in India’s financial capital largely rose in value, the increase in value has been slower than recorded earlier. Hence the value of luxury houses in Mumbai, though displaying a positive trend, is slowing.
The index that was used to track the movement of real estate prices in Mumbai ranked India’s financial capital 24th among the 41 cities where the index was used to track the price movement of real estate.
How Other Indian Cities Fared
Property values in other cities in India were also tracked by the index revealing that Mumbai was the only city in India where real estate capital values were in the black. In New Delhi the capital appreciation was negative and overall, real estate values dropped by 2.6 percent. The story was a little more positive in Bangalore where, though the value of real estate fell, at -.2 percent; it fell by a smaller magnitude than it had in Delhi.
An International Index
The index which tracked capital values of forty one cities, tracked cities lying within India and outside the country as well. According to the index, certain cities in China displayed double digit growth numbers. Chinese cities such as Beijing, Shanghai, and Guangzhou were at the top of the index and together produced growth in excess of 26 percent in the quarter measured.
It has been hypothesized that Guangzhou’s real estate market grew at a rate of 36.2 percent because it is a seller’s market with low inventory and because of the low starting base price of real estate in Guangzhou. Many have suggested that the best real estate in Mumbai could be compared with real estate in Shanghai, yet home prices in Shanghai, while already high, rose by 19.8 percent, leaving no doubt that India’s financial capital had still a long way to go before becoming a competitor to Shanghai’s housing market.
We’re Still Discussing Demonetization
A respected economist stated that the price of luxury real estate in India is still bogged down due to the shock it received from demonetization. Yet the same economist has shown that globally, Mumbai’s property market performed better than the real estate markets of cities such as Zurich, London, and Milan all of which were in the red.
Real estate trends in Mumbai indicate that after realty prices registered a high price growth of 3.2 percent in 2015, this year they dropped to where they had been in the first quarter of 2013