Mumbai starts to rival New York and London

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by Kay Murchie

Recent data from the Global Property Guide has revealed that house price inflation in Mumbai is rivalling that of New York, London and Moscow.

Mumbai, India’s heavily populated city and financial capital has watched its growing economy drive up the prices of city centre apartments to between US$9,000 and US$10,200 per sq m. This massive increase has pushed property beyond the reach of the average local. However, there’s still quite a way to go before they reach London’s prices of $24,250 per sq m.

The launch of the IT industry has had an affect across most of
India’s big cities, including Bangalore, Chennai and Delhi. The impact of the IT industry has had the biggest affect in Mumbai, property prices in built-up areas are over-crowded and countryside dwellers have relocated.

With regard to investment potential, India’s pro-tenant laws have restricted rental yields. Mumbai monthly rents can cost up to $10,000 but typical yields are only 3%-4.7%.

According to the Global Property Guide, Bangalore is probably the best for returns. While property averages less then both Delhi and Mumbai at just $965 per sq m, yields are generally a more notable 7%-10%.