As the property market grows through its various cycles worldwide, Chetan D Narain does some star-gazing into the future
We see cycles in all markets, be it UK, USA, or parts of central and Eastern Europe, Asia and Asia Pacific. Now within these countries some cities get badly affected and some cities don’t. For example, New York is going through a correction phase but Hongkong is holding on strong. Dubai and the rest of UAE has been on a non-stop price rise and with oversupply about to hit the market corrections have started.
One thing is for sure - that after the correction phase goes through its process, Dubai will sustain stability due to their commitment towards making it into a global city and destination. Roads, bridges and metro work is in progress on a 24x7 basis and they work on very stringent time lines.
In Singapore, we are seeing resistance because premium sea face properties are asking for S$4000/- (Rs.1,30,000/-) in a location like Sentosa. There too, prices are expected to correct by 15 to 20% over the next year. Most of these developed cities are chosen as destinations to settle into for career, family, health, education, environment infrastructure, weather, civic discipline etc. Singapore, for one, is most preferred for the obvious reasons since it has it all.
Coming back to Mumbai, we can and most probably will have it all, within the next 10 years. All we need is discipline within the ‘political will’ to do it. Having said that, we are about to witness the beginning of the correction cycle. The difference today is that sellers and developers are quoting almost 25 to 30% higher than the realistic market value or price. Who decides the value? If you ask me, it is always the buyer. Then a professional property consultant-cum-valuer who knows the inside-out of the business and sentiment of buyer and seller decides the value. Some valuers are compelled to agree to the seller’s price and claim the same to be a benchmark, which to me never made sense. Now the same folks who talked nonsense will talk sense, given how things are shaping up in the finance and banking sectors.
On the commercial front by 2018 ‘Grade A’ office buildings located at Worli/Prabhadevi/Parel will be in the range of Rs 50,000 to Rs 60,000, Bandra Kurla Complex Rs 60,000 to Rs 80,000, Santacruz Rs 50,000 to 60,000, Andheri Rs 30,000 to 40,000. Nariman Point might just still ride highest around Rs 75,000 to 90,000, given the fact that South Mumbai redevelopment would have taken shape in 10 years and there would be enough reasons for sustainability.
Retail is one complicated segment to predict because it would be governed by demographics of a given location, accessibility, connectivity and of course quality and brands incorporated within. This segment will see the sharpest correction and will separate the men from the boys within the next five to seven years and by the end of 10-year period we would see sustainability.
Special Economic Zones would be one segment to watch out for. Once again within the next five to seven years one would know what is finally happening outside the periphery of Mumbai. This would bring enormous job opportunities and real estate transaction volumes would see never seen figures in times to come. This to me is the future of India. SEZs will bring about great infrastructure necessities like power, road, rails, airports, and ports, without which they will never be able to be successful. The township projects in 10 years from now will see the success stories too since all the development on SEZ will bring about habitation.
The future looks bright and like I said above - only if our ‘political will’ to be a super country sustains and our politicians remain more focussed on the much needed issues. We too must stay focussed and be graceful as people of this city/country maintaining and adapting to the right civic, moral sense and conduct and then we will only see prosperity over the next 10 years and beyond!
We can, and most probably will, have it all within the next 10 years
All we need is discipline and ‘political will’ to do it