Average cost of a flat is now Rs. 2.71 cr

The average cost of an apartment in Mumbai has now reached Rs. 2.71 crore, Naresh Kamath reports.

Planning to buy a house? Here is some bad news for you.

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The average cost of an apartment in Mumbai has now reached Rs. 2.71 crore.

A survey conducted by Liases Foras, a real estate research firm, found that the rates were Rs. 2.69 crore in October last year.

“There were several new launches, especially in the island city and the western suburbs where rates are higher compared to the eastern suburbs, which hardly saw any activity,” said Pankaj Kapoor, CEO, Liases Foras. “Builders have increased sizes of apartments thus contributing to increased costs,” he added.

The average cost is the total capital value of all flats divided by the total inventory in each city.

Even the Mumbai Metropolitan Region, which includes Navi Mumbai, Thane and Raigad apart, saw the average costs increase to Rs1.17 crore from Rs1.04 crore in the last quarter.

According to Sukhraj Nahar, director, Nahar Group, the prices were increasing due to escalation in projects costs. “Land costs have increased and prices of raw materials have touched the sky,” said Nahar. “In addition, heavy taxation, along with delays in permissions, only make things worse. We are forced to levy such high prices to recover our money.”

Ramesh Prabhu, chairman, Maharashtra Societies Welfare Association, said. “These rates are highly unrealistic, which keeps majority of population out of purchase plans.”