Investor interest in Navi Mumbai, Thane properties on rise: CBRE

MUMBAI: Investor interest in property developments in Navi Mumbai and Thane has been on the rise in the backdrop of proposed development of international airport and other infrastructure projects. High interest rates and unaffordable prices in Mumbai and its suburbs are also key reasons for investors to focus on relatively affordable projects in Navi Mumbai, said property consultant CBRE.

Given the growth in investor appetite for these relatively affordable projects, property prices in these suburbs have moved up 7-8% between July '11 and June '12, according to a report by the property consultancy firm. Apartment prices in premium locations such as south and central Mumbai grew at a modest 2-4% over the same period.

“There are some end-users too, but the larger portion is investors. Apart from ongoing and proposed infrastructure development, price is definitely a pull factor,” said Anshuman Magazine, CMD of CBRE, South Asia.

The lesser known nodes of Karanjade, Ulwe and Dronagiri in Navi Mumbai that are currently being developed by CIDCO are already witnessing increasing interest from investors due to their proximity to the proposed airport, the report said.

The residential market in Mumbai witnessed subdued growth during the first half of 2012 due to high interest rates. While there was a decline in supply addition compared to the second half of 2011, the stock of unsold inventory increased during the review period.

South and Central Mumbai, which offer premium residential options, have witnessed limited supply during the first half of 2012. Developers have adopted a cautious approach due to large inventory of unsold stock in these micro-markets, CBRE said. Apart from Mumbai, there was demand for mid-segment and affordable housing in National Capital Region and Bangalore as well.