Advertisement
Tuesday, Oct 26, 2021
Outlook.com

A Skyline In Shades Of Red

Artificially-inflated figures and the liquidity crunch have brought Bombay's property prices crashing down

A Skyline In Shades Of Red
A Skyline In Shades Of Red
outlookindia.com
-0001-11-30T00:00:00+05:53
The skyline in Bombay was symbolic of the boom in real estate till a few months ago. Not any more. The big city with bright lights has seen its land prices dimming over the past year. The real estate slide has shattered many an investor's dreams, mirroring the anaemic stock market. "The swing looks big because the prices went so high, much like the Bombay Stock Exchange Index when it shot over 4,000 and came down," says Parag Munot, director of Kalpataru builders. Unrealistic, artificially-inflated prices, coupled with the liquidity crunch, have taken the wind out of the property market's sails. Fuelled by the depreciating rupee and political uncertainty, the fallout of these factors is now obvious in the Indian real estate market. For Bombay in particular, the plunge, after an unusual high, has come across as remarkably sharp.

Is this what liberalisation had in store for the city? "Economic reforms released an enormous demand, with the supply inadequately addressed by the Government," observes Michael Thompson, managing director, Colliers Jardine, Hong Kong headquartered real estate consultants, taking a look at the state of the Indian market. "A lot of non-resident investors felt the soaring prices in Bombay wouldn't sustain, and started looking at other cities," he adds. The metro attracted a lot of liberalisation-related publicity, but couldn't hold the interest it attracted. A real estate consultant calls it "the cocktail circuit evaluation process", and Niranjan Hiranandani, one of Bombay's most prominent builders, rubbishes the notion. "NRI investment has not been more than 5 per cent in Bombay, except in certain areas," he says optimistically. "The position is very simple. Prices shot up over 200 per cent, now they are tapering off."

The poor quality of houses available ill-matched with incredibly over-priced property; and a liquidity...

Advertisement

Outlook Newsletters

Advertisement
Advertisement
Advertisement

Read More from Outlook

Aryan Khan Drug Case: Hearing Adjourned, Will Resume Tomorrow Afternoon

Aryan Khan Drug Case: Hearing Adjourned, Will Resume Tomorrow Afternoon

The Mumbai High Court is hearing Bollywood superstar Shah Rukh Khan’s son Aryan Khan’s bail petition following his arrest by the Narcotics Control Bureau on Oct 3.

Explainer | Why A Lawyer Is Seeking FIR Against NCB's Wankhede For 'Extortion' In Aryan Khan Drugs Case

Explainer | Why A Lawyer Is Seeking FIR Against NCB's Wankhede For 'Extortion' In Aryan Khan Drugs Case

On Monday, a lawyer approached the Mumbai police with a complaint seeking registration of an FIR against Sameer Wankhede and five others for extortion in the drugs-on-cruise case.

IPL Controversy: CVC Capital Under BCCI Scanner

IPL Controversy: CVC Capital Under BCCI Scanner

The BCCI on Monday named RPSG Ventures Limited and Irelia Company Pte Ltd. (CVC Capital Partners) as owners of the new IPL teams from 2022.

'TMC & AAP On A Mission To Split Congress Votes And Help BJP In Goa': State Congress Chief

'TMC & AAP On A Mission To Split Congress Votes And Help BJP In Goa': State Congress Chief

Goa Congress president Girish Chodankar strongly asserted that the voters cannot be wooed with false promises and money as people are deeply rooted in the Congress.

Advertisement