Life in the Maximum City is changing:
A shanty in Dharavi is fetching a price of over Rs 1 crore, and real estate prices in Asia’s second-largest slum cluster are beating those in posh central Mumbai areas like Lower Parel.
Sample this: an 80-sq ft house in Dharavi costs upwards of Rs 25 lakh today, which is over 31,000 per sq ft, while Lodha had recently launched a new project in Lower Parel at Rs 23,000-25,000 per sq ft. In a market where sales of apartments have slowed down significantly, especially in south and central Mumbai, property sales in this slum cluster in central Mumbai have gone well and prices have doubled in the last couple of years.
Take the example of Amrish Devaliya who listed his 450-sq ft Mumbai home on a popular property portal last month. His asking price was 1 crore, but now he’s hoping to get much more. Devaliya’s property isn’t located in one of Mumbai’s many middle-class hubs, but a shanty inside Dharavi, where property prices have been on the rise over the past few years.
While the rest of the city battles falling home sales which are down 50% from the peak of June 2009 and a huge inventory pile-up of 40 months (139.33 million sq ft as of March 31, 2013, according to property research firm Liases Foras), this 427-acre slum, home to lakhs of labour that serves the Maximum City, has stood out, thanks to continuing high demand for comparatively ‘cheaper’ homes by an immigrant labour force which caters to the city as domestic help, plumbers, daily wagers, other office workers or those who run micro businesses. A healthy market usually maintains an inventory of around eight months.
Could it even be a bubble?
Prices of houses, which have tin or wooden roofs, or sometimes slightly better with brick structures, but no attached bathrooms, have more than doubled in the last two years. Typically, deals for these homes are struck by the roadside. If you are on the lookout for a house here, you could be accosted by a so-called real estate agent at the corner of a street. These agents scour the streets, looking for buyers and sellers and most of them don’t even have a registered office: they get 2% of the deal size as commission in return for their services.
Here is more, and I thank a Harsh Ketkar, a loyal MR reader, for the pointer.
Here is an excellent piece on building in Mumbai, it ties together infrastructure, civil society, Jane Jacobs-like ideas, and other points, all in a very short space.