Hard pressed with a huge population, the financial capital of India Mumbai has always been a subject of acute shortage of housing and is rather infamous for that reason. Thanks to the heavy shortage of houses.

As per the estimates of real estate services firm Colliers International, Mumbai requires an addition of at least 84,000 houses every year but the combined supply from government bodies and private sector is roughly 55,000. This shortage is cumulating for the past many years, resulting in a sharp difference in demand and supply of housing in the city.

On the other hand, the city adds thousands of people to its population base every year, from outside and from within.

That’s why, finding a suitable house is a Herculean task in the city. Now that the availability of residential real estate in Mumbai is limited the capital prices of housing assets like flats, apartments and quarters have shot up like a phoenix

What’s happening?

House rent in Mumbai have been reacting with the scenario. However, the chances of correction can never be ignored as the markets overheat, just the way it happened in late 1990s when the rental values were historically slashed by 10-15 per cent.

At present, renting a house at Malabar Hills costs staggering Rs 12-18 psft a month. Some similar is the matter with Nepeansea Road where you have to shell out as much as Rs 10-15 psft of space.

However, the boom in the services sector has enabled corporate executives to avail of houses at these rates, as well. People are looking to stay closer to their offices to avoid exertion of distant traveling and are ready to pay a bit more.

Herein the demand for luxury apartments in Mumbai on rent is also rising considerably.

More on Rental Values..

Amidst the all pervasive bullish trends, exceptions are seen at Bandra where the rental values and capital values have shown disproportionate progression. The capital prices in this area are ceiled at Rs 20,000 psft while the average rentals are close to Rs 4-10 psft a month.

Apartments at posh localities of Prabha Devi, Khar, Santacruz and Worli are available in the range between Rs 8 and Rs 16 psft a month.

Juhu (Rs 8-10 psft) and Andheri (Rs 4-8 psft) are among the areas where you can heave a sigh of relief as far as the comparative rentals are concerned.

Interestingly, the yields from rental property in Mumbai have come down significantly with whopping appreciation in capital prices.