Mumbai Real Estate: all price no value

Mumbai versus Delhi - the different REAL ESTATE story

The real estate market in Mumbai will face structural headwinds post the Mumbai trans harbour link (MTHL) gets built.?This opens up the eastern seafront on the mainland opposite south Mumbai. ?This increases the supply of the most scarce resource in Mumbai - Land.?Delhi had a metamorphosis from New Delhi to NCR with the addition of Gurugram and Noida.?Both were adjoining states region - HR and UP, so they had a vested interest in developing the surrounding regions of Delhi UT.?So big companies were set up in Gurugram and Noida with residential areas also developed nearby. These kept the price of real estate in Delhi in control.?

In Mumbai reverse was the case. Politicians + Builders had a vested interest in the keeping land supply less. What is NCR for Delhi, Mumbai’s equivalent is MMR. But the Municipalities associated (Mira Bhayander, Vasai Virar, Kaylan Dombivali, Thane, Navi Mumbai) had no power to take calls on the development of industries or commercial business districts (CBDs).?That power rests solely with the state government. And for MH politicians, Mumbai was a note bank - vote from Baramati notes from Mumbai. Hence there was no land available to set up the big software parks. MH politicians were short on vision and long on corruption. ?In the process, Mumbai lost citizens like Infosys founding team and Azim Premji.?Also, BFSI did not require as large offices as IT companies then and even now.?

Another advantage for Delhi was that farmhouses of Delhi at Mehrauli and Chhtrapur were equidistant from CP and new the kid in town, Gurugram. So the new office and old office were the same distance away, only the direction was different.?So the Laalaa's and Sethjis of Delhi were not much affected when Gurugram came and their bigger corporate office shifted from Delhi to Gurugram.?For the Mumbai Sethjis it was not so. From Altamount Road or Napean Sea Road, one went north only while going to London to catch a flight (Many SoBo's kids have still not gone beyond Andheri in their life). ?Hence new CBDs came up with a lag. ?Also in Mumbai, only Mukeshbhai had a helipad.?So he bought the land the NOCIL's erstwhile petrochemical plant, mothballed it and set up the Jio Centre.?Everyone could have bought a helicopter, but where to make the helipad??

So there will be structural headwinds to Mumbai Real Estate due to MTHL, it will take at least 5-10 years to play out. The supply of land will increase. Metro will also play a role. But micro markets may play out differently. Thane will see no or negative returns as land northward is no constraint.?Goregaon land will be a constraint also NESCO will go on adding office space (Great location -near to Metro and Local station).?So returns may not be negative.?Samundra Mahal will always command a premium and always priced above Rs 1 lakh per sq ft as the house for the son will be bought in the same building post he gets married and there are many bachelor sons.?Bandra, Khar, Santa Cruz and Vile Parle will also not see a dip in prices. Supply will be low as plot size are small and even for a re-development project having 13 flats will see a max addition of 5-10 flats (depending on configuration). ?BKC is very nearby on the east, the sea is nearby on the west, the town is not far by on the south and studios are not far by on the north.??

Pricing inclusive of sprit and Energy :)

Another feature in the Mumbai real estate reduction in standard deviation of the price range. Bandra (pincode 400050) price range is more than or equal to that of the Walkeshwar, Malabar hill. Ghatkopar and Andheri now have the same price ranges. But anywhere and everywhere in Mumbai there is no value for Money.?The other things one gets for the price is the spirit and energy of Mumbai. Whatever it is, if anyone has a clue of what it is, please reply and enlighten me.?Thanks in advance.?