Is this the second round of the Mumbai property price bubble?

Over eight months, property prices at Powai in central Mumbai have almost doubled

Powai is a tony residential location in central Mumbai. Property prices here are reaching for the stratosphere. Rates have almost doubled over the past eight months. Recently, a two bedroom-hall-kitchen (BHK) of 985 square feet (sq ft) in Lake Homes, a residential complex—developed by Ekta World and Supreme Universal— sold for between Rs 90 lakh-Rs 95 lakh. During the slowdown (around nine months back), an apartment of the same size would have sold for Rs68 lakh. In 2007, when the real-estate segment was at its peak, this apartment would have sold for Rs78 lakh, revealed a source.

Prices have been steadily going up in this apartment complex (Lake Homes). Around a month back, the property was priced between Rs80 lakh-Rs85 lakh; four deals took place at these prices. “Prices have been rising quite rapidly. I have seen four-five deals happening at Rs80 lakh-Rs85 lakh—recently a deal took place between Rs90 lakh–Rs95 lakh,” said a resident of that area, who preferred anonymity.

He also added, “The fourth phase of Lake Homes was launched at Rs5,400 per sq ft in May 2009, because the realty sector was going through a slowdown. But now I feel that the bubble is blowing up.” Currently, a 2 BHK in Lake Homes (of 985 sq ft) is priced at Rs 110,00,000, according to Magicbricks.com. A property agent in Powai said that the current price of a resale property in Lake Homes ranges between Rs11,000-Rs11,500 per sq ft. 

The Nahar Group, which was selling new buildings (of 925-975 sq ft) at its Nahar Amrit Shakti project in Powai at Rs52 lakh-Rs 58 lakh, is now quoting a price of around Rs 90 lakh. The group launched a residential project named Lilium & Lantana during the slowdown (around eight months back) at Rs5,400 per sq ft plus floor rise (a premium of Rs50 per sq ft), but now the price has jumped up to Rs9,000 per sq ft plus the floor rise premium. Hiranandani Gardens, a project by Hiranandani Developers, is retailing at a price ranging between Rs14,000-Rs18,000 per sq ft, said the realty agent. This area had reported sale of a 3 BHK flat (1,350 sq ft, fully furnished) at Rs1.15 crore around nine months back. Now it is difficult to get a 2 BHK flat at this price.

On top of this, buyers are also being forced to cough up 3% extra as service tax if the property is under construction. The Budget proposals on service tax on such properties have still not come into force, but developers are apparently passing on this proposed tax to customers. To add to the woes of prospective buyers, home loan interest rates have also gone up.
 

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    COMMENTS

    Dolphin

    1 decade ago

    Bullshit

    raj

    1 decade ago

    This is the same situation in Western Suburbs in Kandivali & Borivali. New projects are being launched with 3 BHK and 4 BHK only. How can middle class person afford this? Salary has not increased and expenses due to inflation is doubled. Looks like my dream of buying a house will never get fulfilled and i'll stay in rented place only

    vivek

    1 decade ago

    how businessman use Black money to avoid tax

    buy a flat in 2.5 crore with 100% white
    sell it at 2.75 crore out of which 1 crore black.. so in balance sheet show loss of 75Laks
    Pay less tax by compensating their operating profit with the above loss

    So simple and govt is giving all businessman real estate sector to play with Black money

    It will hit our Economy hard and Govt revenue too

    RC

    1 decade ago

    Would like to know which is the project shown in this picture.

    Ashok mehta

    1 decade ago

    I fully agree that this is bubble as people's inocme have not doubled in the same period.
    inspite of so many project how price can rise so fast.
    it is all becasue of political corruption. builder has to bribe several goverment department to construct building and he passes all expences to investor

    Activist calls for legal action against Vedanta, miners

    Biswajit Mohanty, an environmental activist, plans to initiate legal action against Vedanta’s refinery in Orissa on the issue of alleged violations of environmental norms. The activist also plans to take legal action on the long-running ‘mining scam’ in the state

    Environmental activist Biswajit Mohanty is planning to initiate legal action against the Anil Agarwal-led Vedanta group for allegedly violating environmental clearances given to its aluminium plant in Orissa. He had also written to the ministry of environment and forests on the issue earlier.

    Apart from the Vedanta group, the activist also plans to initiate legal action against illegal mining in two districts in Orissa.

    “We will take legal action on the basis that the environmental regulations are being violated and hence the same should be withdrawn, and operations should be suspended,” said Biswajit Mohanty, general secretary, Wildlife Society of Orissa.

    Last month, Mr Mohanty had written to Jairam Ramesh, Union minister for environment and forests, alleging that Vedanta was flouting the conditions in its clearance letter by buying bauxite ore elsewhere and then carting it to its refinery on trucks, which is causing air pollution in that area.

    PTI news reports have also quoted Mr Ramesh as stating that a ministerial expert committee that had gone into various mining projects in Orissa found violations of various permissions by Vedanta at its Niyamgiri Hills mining site. 

    A three-member team of the ministry submitted its report to the government, saying that it had found evidence of violations of green norms at the company’s bauxite project in the Kalahandi district of Orissa. However, Mr Mohanty has not received any direct reply to his letter to the ministry.

    “The government should not have allowed the refinery to operate for the past two-and-a-half years. They are causing a huge environmental problem due to the trucks (which are plying), as they are sourcing bauxite from Korba in Chhattisgarh, which is illegal. Around 40,000 trucks ply on this route every year,” Mr Mohanty added.

    Alleging that the companies involved in mining are taking out more ore than permitted, Mr Mohanty said that there is a “mining scam” going on in Orissa, which could be bigger than the one in Andhra Pradesh. He said that he is planning to take action against 40 mines in Sundargarh and Keonjhar districts in Orissa.

    These mines are mainly iron ore mines and some are of chromate and bauxite. These are mines used by some of the large steel companies and business groups, including a state-run company.

    “Every mine is given a cap on the amount of ore that they produce, but the production is much in excess than the one allowed as per the Pollution Act. This has been happening since many years, but the regulatory authority woke up to it only four to five years back. However, action still needs to be taken,” explained Mr Mohanty.

    Mr Mohanty claims that many of these mines neither have environmental clearances nor have they have applied for it. “These were mines allotted many years back. If the companies operating these mines wished to exceed the capacity, they should have approached the concerned authority for an increase in the cap,” he added.
     

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    Shadi Katyal

    1 decade ago

    We are full of such bleeding hearts. Does Mr. Mohanty know the meaning of environment or he just wants his people to be without work and thus create more mischief..
    India where cows roam and eat garbage and leave dung where flies multiply is environmental safe but when mining dust is not.One cannot make omelet without breaking eggs.
    Maybe the company refused to pay him and thus black mailing stats.
    what kind of thinking such bleeding hearts leaders have for the nation or people who are employed,
    Did we not learn from implosion of Russia or our won Bombay textile and calcutta Jute industry that too much unionization and outer interference is not good .
    Indfia need control of such trouble maker and some discipline and learn ethics of work.

    Cairn's oil deposits in Thar rise to 4 billion barrels

    Cairn has said that it is on track to ramp up output from its Rajasthan fields to 125,000 barrels per day in the second half of 2010 from the current output of around 20,000 barrels per day

    Cairn India Ltd on Tuesday said that oil reserves in its Thar Desert field in Rajasthan have increased to 4 billion barrels, reports PTI.

    Previously, discovered resources were pegged at 3.7 billion barrels of oil and oil-equivalent gas, the company said in a press statement.

    "Our resource base provides potential to produce 2,40,000 barrels per day (as against the previous estimate of 1,75,000 bpd)," it said.

    Cairn said that it is on track to ramp up output from its Rajasthan fields to 1,25,000 bpd in the second half of 2010. Current output is around 20,000 bpd.
    The company has tied up sale of 1,43,000 bpd (over 7 million tonnes a year) of oil. Cairn said that production potential from Mangala, the largest field in the block, has increased to 150,000 bpd from the previous 125,000 bpd.

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    Shadi Katyal

    1 decade ago

    Could some one please let us know if the local population is being helped in infrastructure,power schools and hospitals.?
    What are the benefits of people of that region and Rajsathan??

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