With demand for housing and new project development picking up, real estate prices in Mumbai have grown at close to 5% in 2014. The sector is likely to grow at an accelerated pace in the near future, making investment in property increasingly lucrative. Entering the market at the right time could yield high returns for the smart investor. However, there are other key considerations an investor has to make before the final decision to invest. Foremost among these is location.
An overwhelming majority of Mumbai’s new projects have come up in the Mumbai Suburban district, indicating a trend of decentralisation away from the traditional economic centre in the Mumbai island city. This demographic shift was visible in the 2011 Census, where the population in the island city witnessed a 7.6% drop, while the population in Mumbai Suburban increased by 8.2%. The central business district has also gradually moved northward from the traditional centre of Nariman Point to Lower Parel and Bandra Kurla Complex. As a consequence of this, Lower Parel’s prices have more than quadrupled over the last seven years, and grown 17% in 1Q14 alone.
In order to further narrow down on the ideal locality for investment, investors need to make several other considerations based on their budget, risk appetite, and investment period. A key factor that determines the optimal location of investment is the existing and planned infrastructure in the locality. For instance, upcoming developments in the Navi Mumbai region such as the Navi Mumbai International Airport and the Mumbai Trans Harbour Link are likely to positively impact prices. Already, the locality recorded a price growth of 21% in 1Q14. The expansion of the Metro and Monorail projects, which will increase connectivity between the city and the suburbs, is also likely to push up prices in the suburbs.
As with all investments, it is essential for real estate investments to be made with a complete understanding of the individual’s specific requirements and current market information. A comprehensive due diligence of the project and the developer is essential before any purchase is made. Only then will the investor be able to minimise risk and maximise reward.
source: housing.com
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