Housing land prices in Mumbai rising rapidly
According to Knight Frank’s Prime Asia Development Land Index, the economic capital witnessed maximum appreciation in prime residential development land. The index takes into account the cost of prime residential development land in 13 major cities across Asia that consists of NCR, Bangalore and Mumbai in India and determined that the Southeast Asian cities witnessing rush cost increase.
In Mumbai, the modification in development standards coupled with increase in prime residential cost resulted in an appreciation of 35.2 percent in the prime residential development land in last 24 months.
According to the report, notwithstanding the muted growth in end product price during last year, the land suitable for prime residential development noticed a lot interest from buyers.
The report also pointed out that the poor economic situation that impacted office space absorption coupled with the large quantum of office supply was responsible for decrease in the prime office development land index by 13.1 percent during the last 24 months.
Report also mentioned that during 2014, a large office supply pipeline and a little improvement in demand will keep rental in check. As result of this the requirement of prime office land will become less.
Dr. Samantak Das, Chief Economist and Director – Research, Knight Frank India, says that Mumbai noticed maximum apperception in the prime residential development land as compared with NCR and Bangalore. He further added that low transaction volumes coupled with large quantum of office supply is responsible to a decrease in the prime office development land index by 13.1 percent in Mumbai during last 24 months.
Mr. Fali Poncha, Director, says that the increase in population and economic condition have resulted in a dramatic increase in demand for housing in Mumbai. Limited availability of land, poor quality infrastructure and regulatory constraints, have severely restricted the creation of new housing stocks. This has resulted in demand supply gap and consequent increased the property prices.
Source: The Business Line
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