Residential property in Mumbai is out of reach for middle income buyers

As per a 2014 survey by Savills, a reputed real estate firm, Mumbai was ranked as world’s 12th most expensive city for living and working. Besides Mumbai, cities like London, Pairs, Tokyo, New York and Sydney were also ranked at the 12th position. According to the industry reports, there is a wide gap in demand and supply of residential property in Mumbai. However, this has not pushed developers to reduce the rates in order to sell more units.

Whether you are looking at apartments in Dadar or searching for a flat in Bandra, prices are skyrocketing despite market changes. For instance, in Navi Mumbai, rates are quite high for residential units due to the proposed new airport. Even though the airport is nowhere in the picture, rates have been increasing for the buyers. So, what is causing the prices to increase despite people not buying properties? Some believe that the realty market in India works according to the politicians and real estate companies. Politicians have an incentive in holding the prices at a high level.

As pointed out by the Residex Index of National Housing Bank, rates in the city increased by 18.7% between 2011 and 2014. This increase happened despite the fact that unsold property inventory has grown significantly.

Expensive Areas for Residential Property Investment

Altamount Road is one of the most expensive residential streets in Mumbai. Mukesh Ambani, Chairman of Reliance Industries and Kumar Mangalam Birla, Chairman of Aditya Birla Group have their house on this road which is located in the southern part of the city. This street is also home to various other business families such as Tatas and Mafatlals. Many Bollywood actors also have their flats and bungalows on Altamount Road which is parallel to the Peddar Road.

Reportedly, buyers will have to shell out approximately 60,000 INR per square feet when buying a house on this street. Gentry make this address extra special. Compared to other parts of Mumbai, this location has a lot of greenery. Antilla, the 27-storey, luxury home of Mukesh Ambani is the star attraction of this road.

Can Buyers Expect Price Correction in Future?

According to a knight Frank report, a global real estate brokerage firm, there is a mismatch in demand and supply of MMR’s (Mumbai’s Metropolitan Region) residential property market. This mismatch resulted in a pile up of around 2.15 lacs unsold residential units last year. According to experts, it will take approximately three or more years to sell off these units because rates are too high for buyers to enter the property market.

The realty market in the city doesn’t work on demand and supply. Compared to 2013, demand for properties within the MMR went down by 25% in the first quarter of 2014. City-based developers are not in the favor of reducing prices because this market has a huge holding capacity. There are slim chances of any price correction in near future. Unsold units are mainly located in extended suburbs such as Navi Mumbai, Dombivli, Vasai, Virar and Kalyan.

Rates Skyrocketing for Residential Projects in Goregaon

Real estate companies are launching various residential projects in Goregaon, offering attractive options to the buyers. This suburb has witnessed unprecedented growth in the last few years. It has emerged as a sought-after location for potential buyers from Mumbai and all over India.

Affordable Rates Compared to Central Mumbai

Being one of the greenest suburbs in Mumbai, this lush destination is a favorite among buyers who don’t want to stay in a densely populated area of Mumbai. Rate is also an important factor due to which this suburb has become quite popular. Even though property rates have skyrocketed in this area, price of a flat in Goregaon is still affordable compared to the rates in Bandra and Andheri. Since belts from Bandra-Andheri and Powai have become unaffordable for majority of buyers in the city, they are coming to Goregaon for buying a property.

Developers Launching New Residential Projects

Considering the growing demand, property developers as well as real estate agents in Mumbai are making good money by helping people buy, sell or rent Goregaon properties. Developers are taking advantage of the growing demand by launching large township projects and residential complexes with luxurious yet affordable flats. They are offering world class amenities to ensure a comfortable living experience for the buyers.

Why Buy a House in Goregaon?

Located in the northern part of Mumbai, this suburb is easily accessible through auto-rickshaws, trains and taxis. Film City and Filmistaan are also located in this part of the city. Many famous Bollywood celebrities and businessmen also have a house in Goregaon.

This suburb is quite close to commercial areas such as Andheri and Bandra. The Western Express Highway is in proximity, making it easy for the residents to reach other parts of the city conveniently.

Proximity to Bandra-Kurla complex and eastern and western suburbs has accelerated the demand for properties in this area. It has reputed colleges, schools, malls, restaurants and healthcare facilities. Growth in infrastructural facilities at Goregaon has pushed property rates.

Per square feet property rate in Goregaon West ranges between 12,500 and 15,500 whereas in Goregaon East, properties are available at 12,500 to 18,500 rupees per square feet.

Will 2015 Bring Good News for Mumbai’s Real Estate Sector?

Last year, cities like Mumbai and Kolkata didn’t witness any increase in demand for properties, however, some developers launched new projects during the end of 2014. According to the industry experts, 2015 will bring some good news for the housing sector in India. It is being predicted that global investors will start showing renewed interest in India’s residential market. Spike in FDI (Foreign Direct Investment) in the real estate sector will also increase. Developers will be able to enjoy improved liquidity as new rules for Real Estate Investment Trusts are also expected to be implemented this year.

In order to increase demand, developers will have to make price corrections. This might prove to be a good year for buyers looking for attractive realty options in Goregaon or other parts of the city.

How to avoid Repossession of your Car during Bankruptcy?

Car is no longer a luxury for an American; it has become a necessity for his survival.

Don’t worry about your car, when you file for Chapter 7 bankruptcy. You can keep using your car during bankruptcy. You just have to inform the bankruptcy court about your decision by filling an official document called Statement of Intention (SOI).

Why is it important to take a quick decision about your car?

When a person files for bankruptcy, the “Automatic Stay” prevents creditors from repossessing your assets. But, the stay is not absolute. The lender can ask the bankruptcy court to remove the stay and repossess your car. So, it is important that you take care of your car before filing for bankruptcy.

If you want to keep your car during Chapter 7 bankruptcy and don’t want it to repossess, you have two other options:

1. You can opt for Redemption and pay a lump sum amount to the lender. The amount will be equal to the current value of the car.

If you have money to cover the current value of your car, you can opt for redemption and buy the car disregarding the total loan balance. For example, your total loan amount may be $15,000 but if the car’s current value is just $10,000, you will have to pay $10,000 only.

2. You can enter into a contract with your lender and continue to make payments to the lender as if you did not file for bankruptcy. It is called Reaffirmation.

Now, most people who file for bankruptcy don’t want to part with a large amount of money. So, redemption is a less popular choice. If you want to keep using your car during bankruptcy, you can choose reaffirmation and continue making smaller payments to the lender in comparison to making a lump sum payment.

What are the benefits of Car Loan Reaffirmation?

• Impossible to get loan approval

Lenders don’t provide car loan approval to people in bankruptcy. Also, it becomes very difficult for people with a history of recent bankruptcy to obtain a loan. So, it is wise to stick to your current loan program.

• Higher loan terms

Even if you manage to get approval, the interest rates are exceptionally high on post-bankruptcy auto loans. It is extremely risky to obtain a loan with exorbitant rates because it will impair your credit score.

• Upper hand in the negotiation process

If you let the car repossess, lender will have to carry out a lot of processes to recover money. He/she will have to sell the car at an auction and accept whatever money he/she receives. So, it is in his/her interest that you keep making payments. You can take advantage of this situation and obtain lower rates on your loan.

So, now that you know all about car loan reaffirmation, do not worry about your car during bankruptcy.