Mumbai's Luxury Property Market: What's Driving the Surge in Prices?
Mumbai recorded the second-highest annual price growth for prime residential properties worldwide, with a 13% increase in the second quarter of 2024.
MumbaiLuxury PropertyReal EstateKnight FrankGulam ZiaReal Estate MumbaiSep 01, 2024
According to a recent Knight Frank report, Mumbai recorded the second-highest annual price growth for prime residential properties worldwide in the second quarter of 2024. The report, which surveyed 44 cities globally, showed that Manila in the Philippines led the list with a 26% year-on-year increase.
Zia discussed the report's findings in an interview with CNBC-TV18, stating that the abundance of wealth creation is driving the prices of luxury properties so high. He noted that the luxury market is not just limited to India but is a global phenomenon, with buyers from around the world investing in prime residential properties.
However, Zia also expressed concern about the fatigue creeping into the mid-segment of the market, which could have a ripple effect on the entire real estate sector. He emphasized the need for rate cuts to stimulate demand in the lower end of the market.
When asked about the sustainability of the premium market's growth, Zia said that while the upper end of the market is still showing no signs of reduction in velocity of sales or number of transactions, the mid-end market is showing signs of fatigue. He cautioned that if prices continue to rise at the current rate, there may be a point where buyers put their hand up and say, 'enough is enough.'
The interview also touched on the aspect of real estate as an investment opportunity, with Zia noting that for most Indians, it is considered a safe haven for investment. However, he emphasized that the continuous price rise will be a problem, whether it is taken as an investment class or not.
Overall, the luxury property market in Mumbai is expected to continue its upward trajectory, driven by the growing purchasing power of buyers and the abundance of wealth creation. However, the mid-end and lower end of the market may face challenges, and rate cuts may be necessary to stimulate demand
Knight Frank is a leading global real estate consultancy, providing comprehensive services across the residential, commercial, and agricultural sectors. With a presence in over 500 offices across 60 countries, Knight Frank is one of the largest and most respected real estate consultancies in the world.
Knight Frank India is a leading international property consultancy, providing comprehensive services across the residential, commercial, and agricultural sectors. With a presence in over 500 offices across 60 countries, Knight Frank is one of the largest and most respected real estate consultancies in the world.
Frequently Asked Questions
What is driving the surge in Mumbai's luxury property prices?
The abundance of wealth creation and growing purchasing power of buyers, both in India and globally, are driving the prices of luxury properties so high.
Is the luxury property market sustainable in the long term?
While the upper end of the market is still showing no signs of reduction in velocity of sales or number of transactions, the mid-end market is showing signs of fatigue, and continuous price rise will be a problem.
What is the current state of the mid-end and lower end of the market?
The mid-end market is showing signs of fatigue, and the lower end of the market is not improving at all, with a need for rate cuts to stimulate demand.
Is real estate considered an investment opportunity in India?
Yes, for most Indians, real estate is considered a safe haven for investment, but the continuous price rise will be a problem, whether it is taken as an investment class or not.
What is the outlook for the luxury property market in Mumbai?
The luxury property market in Mumbai is expected to continue its upward trajectory, driven by the growing purchasing power of buyers and the abundance of wealth creation.
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