Mumbai
Given the sluggish demand for homes owing to the already crippling prices, there is not much scope for appreciation in Mumbai. An average hike of 7% was observed here in 2014 primarily due to the new development control (DC) rules that came into effect from 2013. Developers had to start paying for additional (fungible) FSI.
Other reasons behind the marginal increase in per-square-foot prices include the rise in ready reckoner rates and escalations in the cost of labour and raw materials.
Market dynamics
The eastern suburbs from Kurla to Mulund saw an increase of 6% in 2014 over 2013 and 5% in 2013 over 2012 prices, as land was still available to launch new projects there. South Mumbai and western suburbs between Malad and Borivali recorded a similar price increase as their eastern neighbours.
Bandra, Khar, Santacruz and Juhu also saw average growth in prices, as these areas lack a good supply of high-rises. Rates in areas like Thane and Navi Mumbai did not grow much either, and the uncertainty surrounding Navi Mumbai’s new international airport did not work in favour of the satellite city.
Chembur and Wadala, however, stood apart from this lacklustre trend in residential price growth. Some projects in these two suburbs saw a tremendous price increase of 58% and 50% respectively in 2014 over 2013, thanks to completion of infrastructure projects like Eastern Freeway, which connects Chembur to South Mumbai, and the monorail, which was in the news recently for all the wrong reasons.
Upcoming locations and pull factors
Peripheral areas like Ulwe, Karanjade and Dronagiri situated close to Navi Mumbai could see moderate growth in the coming years thanks to the upcoming international airport in Navi Mumbai and increased connectivity to Mumbai through the upcoming Mumbai Trans Harbour Link (MTHL). These areas have already seen a good growth rate in the past, soon after the airport project was first announced.
Sewree is another area in Mumbai, which could see moderate appreciation thanks to the MTHL. Other peripheral areas like Vasai-Virar, Boisar, Dahanu and Palghar could also see growth thanks to the upcoming bullet train project connecting Mumbai and Ahmedabad. Virar could benefit due to the upcoming Virar-Alibaug multi-modal corridor and the proposed elevated rail corridor connecting it to Churchgate.
Another important project that could lift up property prices in Vasai and Virar is the proposed Delhi-Mumbai Industrial Corridor (DMIC).
