Mumbai rentals have come down!

Heard a renegotiation today for an apartment in Colaba region. The tenant has been able to push the rental down by 30%.

Thats surely an important news. Lets keep cose track of the markets.

Crashing Real Estate?

Real Estate prices in India have seen a serious dip over the past few months. But are the prices sustainable at the current levels or are they gonna observe a sharp fall from here?

Lets look at some data first. Prices in Mumbai in not way back in history but very recetly in 2005 (source Times of India archives for Mar 2005, all prices in per sq ft):
Cuffe Parade - 11-14k
Worli - 6-10k
Wadala - 2.7-3k
Chembur - 3.5-4.5k
Mulund - 2.4-3.5k
Bandra W - 5.5-10k
Andheri W - 2.8-5.5k
Goregaon W - 2.2-3k
Mira Road - 0.65-1.2k

Question is whether the 2005 price can ever come back?

Current factors:
- global equity markets falling
- job losses, less nri money, dip in consumer demand = no liquidity in markets
- this time the bonus/salary of all bankers in city have dropped 60-80%
- current sale volumes of developers is less than 10-20%
- customers backing out from existing deals where 10-20% was stuck (as the prices have fallen below that)
- no foreign funds investing in india currently
- to top the all - very negative perceptions in the market

Overall it looks like that the markets wont rise from here in next 2-3 yrs - which means that the carrying cost (if someone invests today vs invests after 2 yrs) is around 20-25% - huge for individuals.

Lets see the trends. Keep posting what you get as a feedback from the markets.