Only small-sized apartments can save Mumbai real estate
Mumbai has a high residential inventory of 67,000 units, equal to sales of 34 months. While the underlying demand is strong, it is not being converted into transactions due to the high property prices. From a developer’s point of view, low absorption is a source of worry; however, due to high costs of land acquisition, raw material, labour, finance and new costs such as fungible FSI, lowering prices beyond a point seems difficult. Is there a way to end this stalemate? AFP It is important to understand exactly where the problem actually lies – in high property price or high ticket size? While property prices are largely location-driven, ticket size is a combination of size of the apartment and property price. As per the developer community, there is not much possibility of reducing the prices attached to locations. The answer seems to lie in developing projects with smaller apartments. But what made developers focus on larger configurations in the first place? The answer can be found in the past.