Friday, April 20, 2012MiD DAY, Mumbai

ONMYMIND

GIVEN THAT MUMBAI IS THE FINANCIAL LIFELINE OFIndia, the money invested back into Mumbai itself is shockinglymeagre. If you compare Mumbai with the other financial capitals inthe world, you will find that in spite of paying humongous taxes, thecity is just getting worse by the day. The city can’t provide basichousing, food and clothing to its residents. With the kind of taxesthat the 2012 budget has imposed on the city dwellers, I thinkMumbai’s downfall is near. All the major industries are shiftingtheir base from Maharashtra to the more business-friendly states.

Even in real estate, this shift has begun. In the last two years, thegovernment has given clearance to hardly any projects, increasingthe scarcity of flats leading to price-hike. Also, with the governmentdelaying the project approvals, the burden has increased over thosebuilders who have taken loans from banks or investors to start thoseprojects. So, when the projects are approved, the first thing that abuilder does is, he adds the losses he incurred during the waitingperiod, adds his company’s working cost for the next five years, andthen sells the flats. This increases the property price by three-folds.

We just need a single-window clearance leading to lesser corrup-tion and faster work.

We need one window systemDharmesh Shah, director, Unicorn Global

Homes touching price highsRAZVIN NAMDARIAN

WE ALWAYS KNEW BUYINGa home in Mumbai was expen-sive; now we know howexpensive. Thanks to a report byKnight Frank LLP, an interna-tional property consultancy, itwould take an average citizen308.1 years to buy a 100-square-metre luxury or ahigh-end apartment in India’sfinancial capital. These numbersare based on an analysis of realestate with the current wages.This is no surprise except for theastounding idea of havingto work for three centuriesto own your own home. HHPP’’ssfinds out the affordability ofMumbai homes:

Basically unaffordableThe report speaks only of ahigh-end or luxury home. Butfor the middle-class folk in therat race, even a basic 1BHK inthe Mumbai MetropolitanRegion requires a lot of plan-ning and monthly budgeting.Home loans can only do somuch – for a person earning`50,000 a month, would be eli-gible, on an average, for a homeloan of upto `20 lakh to berepaid over a period of 180months. Since most homes herecome with a price tag of `1 croreand above, we are talking abouta monthly income of `2 lakh tobe eligible for that kind of loan –hardly within the realm of thewhite-collar worker. RamakantTrivedi, manager of a bakery,says, “Buying a home inMumbai is not an option at all,

which is why people like me lookfor a home in places likeNalasopara where we can buy a2BHK for about `20 - `25 lakh.”

Best for investmentPrices over the last decade havealmost quadrupled in theMumbai real estate market.There are several factors at playhere, besides the most obviousdemand and supply equation.According to Samantak Das,national head, research, Knight

Frank Services, “Mumbai pres-ents an investment opportunitynot only for those from withinthe city but also across theworld. Due this status, there is apush price from the investor fra-ternity as well. Also, property inMumbai is being purchased notjust owing to the high incomegroups here, but also the accu-mulated wealth with people.Also, there are many communi-ties who are earning andpumping funds into Mumbai’s

property. It’s the best invest-ment avenue as being thefinancial capital, Mumbai’sgrowth potential and economicdrivers are immense.”

The flourishing cityThe MMR is really flourishing.Das explains, “For instance,today if I buy a flat at `1.5 crore,I can also consider, investinganother `20 lakh in property inDombivili or Kalyan, where Ican be assured of returns in the

next 3-4 years. Economistsspeak of price corrections inminimal terms and while thereare micro markets where priceshave been stagnant for the pastsix months, the real estate isonly going up. There are highestreturns on investment inMumbai property.”

Thus, Mumbai realty priceswill never remain stagnant ormay be ‘correct’, primarily asMumbai is the best city in Indiato invest in.

RATES ON THE RISE: Property in Mumbai is being purchased not just by the high income group, but also by people who have generations of accumulated wealth