New Projects Make Way Into Mumbai Market, Should You Rent Or Buy?
Mumbai’s space starvation and struggle with pricing notwithstanding, this property market offers homebuyers a good deal of options to choose from. Data show there are over 10,000 new projects within the Mumbai residential market which will be available for possession within one year.
In terms of sizes and price range, too, there is huge variety available.
New luxury projects in Mumbai
You would find homes measuring 250 sqm that cost you not more than Rs 8 lakh. You would also find flats measuring 1,500 sqft that could cost you up to Rs 30 crore. In developing localities like Naigaon East, Nallasopara, Mira Road, Vasai and Virar, one would find affordability. In established localities like Bandra, Napeansea Road, Worli, Andheri, BKC, Tardeo, Prabhadevi, Powai, Lower Parel, Khar, one would find luxury.
It all depends on what one can afford in a city that is often counted among the least affordable property markets in the world.
Rent vs buy: What is the better option
In India, property is perceived as an asset and living on rent is considered wasting large portion of your income. But, some of those who live in rented accommodations in Mumbai still feel they are better as it is.
Take for instance, 35-year-old Udit Vir Kapur, whose annual income is Rs 30 lakh. Kapur made use of the PropTiger.com calculator to see whether an investment would suit his lifestyle.
He wanted to buy this property that would have cost him Rs 6.50 crore. He would have had to pay Rs 1.30 crore (20 per cent of the deal value) as down-payment. Now, if he gets a home loan at 9.6 per cent interest for a period of 20 years, Kapur would be expected to pay Rs 488,108 per month as EMI. Kapur feels this is not a good deal and hence has settled to live on rent.
“At this point, I would rather not stress my finances by paying that kind of money as EMI. It would adversely impact my lifestyle,” says Kapur.
Spouses Manish and Asha Kadam, however, have decided to do otherwise. They have decided to buy a property worth Rs 70 lakh. Considering their combined annual income is Rs 40.90 lakh, they would be able to afford an EMI of Rs 52,565 over the next 20 years at the same interest rate.
Kapil Gulati, a banker, also weighed the rent-versus-buy situations and settled on a 2BHK in Andheri East.
“I plan to move out for five years, and, in my absence, I will put it on rent which is close to Rs 54,000 per month. This is my first buy in Mumbai, but considering the opportunities the city has for the financial sector, it is worth the money,” he says.
Should you buy and give it on rent?
If you are keen on putting some money into the Mumbai realty, areas such as Chembur, Andheri East, Vikhroli East, Santacruz East, Bhandup West, Kandivali and Khar could be ideal choices since they have registered considerable capital appreciation.
Do note here that price movement in a location depends upon various factors such as developer grand, amenities provided by the developer, upcoming infrastructure in the area, existing infrastructure, etc.
What is the future of Mumbai real estate?
All said and done, housing demand in Mumbai seldom dies down. After all, we are talking about India’s financial capital, where rates as well as home sales numbers have increased marginally even when other property markets in the country remained under a great deal of stress.
Buyers today are investing in ready-to-move-in homes, and Mumbai is no exception.
“It makes sense for buyers to invest in a ready-possession project rather than wait for a new project to come up over a period of time. Also, prices are beginning to rise again, and the market is looking up steadily. This is the best time to invest in property, and a property that is ready to move in obviously has great appeal,” says Ashwinder Raj Singh, CEO–residential services, JLL India.