Mumbai 16th most expensive prime residential market in world: Report

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By Rohit Sharma

MUMBAI:

The Philippines’ capital city of Manila led the Knight Frank Prime International Residential Index (PIRI 100) after luxury home prices jumped 11% last year, bolstered by a lack of supply and a thriving domestic economy. However, Manila’s performance pales in comparison with the top growing residential markets of the past tracked by the index. In the 12 years that Knight Frank has monitored the value of 100 luxury residential markets, the best-performing city has yet to record annual growth below 21%, Knight Frank report said.

Mumbai (67 PIRI rank), which has the most expensive real estate in India, saw a marginal rise in prime real estate costs at 0.3% while Delhi recorded a rise of 1.4% putting it ahead of Mumbai at 55th rank on the survey.

Bengaluru recorded a rise of 1.1% rise in prime residential real estate in 2018 over the previous year. Nicholas Holt, Head of Research, Knight Frank Asia Pacific said, “While Manila’s 11% growth is far from the norm for the city, it confirms the theory that outliers are disappearing, and we are moving to a period of slower price growth. Within Asia-Pacific, a slowdown from a 4.9% average growth rate in 2017 to 2.7% in 2018 illustrates this trend.”

Singapore was the only other city in Asia-Pacific that emerged in the top ten of the PIRI 100. The city-state witnessed more demand for luxury homes following changes to the Seller Stamp Duty regulations. Last year saw prices climbing 9.1%; however, cooling measures introduced in mid-2018, including stamp duties for developers and non-residents, slowed the market considerably, and prices are expected to remain static this year. The third-best performing Asian city is Tokyo, where prices climbed 6.8%.

ASIA-PACIFIC PRIME RESIDENTIAL MARKET

Overall, luxury home prices in Asia-Pacific gained 2.7% with most markets experiencing low, yet steady growth. However, growth in the region was still higher than the global average. In 2018, the PIRI 100 recorded its lowest rate of annual increase since 2012 as the value of prime residential markets around the world rose by only an average of 1.3%, down from 2.1% in 2017.

The slowdown in the PIRI 100 last year is a consequence of increasing global interest rates. “As ultra-low interest rates have driven the global real estate markets since 2008, it is inevitable for the markets to experience lower price growth amid the shift in monetary policy,” adds Holt.

Mumbai ranked 12th in terms of wealth on the index bettering its previous position of 18th in 2017. While Bengaluru was placed 60th in terms of investments superseding Mumbai and Delhi.

Shishir Baijal, Chairman and Managing Director, “Mumbai while being India’s most expensive prime real estate market, still
stacks well against many other markets. Mumbai will buy ten times space as in Monaco and over three times more space as in London and New York. While Dubai allows you to about 50% more space as in Mumbai.”





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