A bubble in the real estate market?
Have you tried buying or renting a house in Mumbai recently? If so, then I wonât be surprised if you think real estate prices are plain expensive, and incredibly so. But thatâs almost always been the case in Indiaâs commercial capital. After all, when was the last time someone told you they got a cheap house in the city?
So is the real estate market in a bubble? We asked Adi Godrej, the man who controls Godrej Properties, if things could get bubblicious. This is what he had to say: âI donât think we are in a bubble, because demand is strong, but we could get into a bubble.â
Godrej, whose family fortune is estimated to be about $5.2 billion, doesnât really care if prices go up in south Mumbaiâs old-money neighbourhoods such as Malabar Hill or Altamont Road, where Reliance Industries chairman, billionaire Mukesh Ambani, is building a 27-storey $1 billion home.
âI would be more disturbed if middle-level and lower-level housing in Mumbai were to go up much,â Godrej told the Reuters India Investment Summit in Mumbai.
Godrej Properties, which is developing a lot of what is termed âaffordable housingâ, expects revenue to jump more than 50 percent in the fiscal year ending in March as rising incomes boost demand for housing.
If prices continued to increase at current supply levels, the Indian residential market could head into a “bubble.”
The company, part of the $2.5 billion diversified Godrej group, defines âaffordable housingâ as an apartment that carries a price tag of less than 2,500,000 rupees or $50,000. Is that within your budget?