17 March,2009 10:27 AM IST | | Agencies
If you live life in 11-month installments, worrying how much more you may have to fork out when your lease comes up for renewal, the tide has turned. Rents across the city are sliding, reports DNA.
In South Mumbai, which is the worst hit, about 50 per cent of lease market flats are vacant. Western suburbs, has also seen almost 30 per cent vacant flats.
Due to the economic slowdown many corporations have curtailed recruitments and sacked or transferred senior executives. Hence, there are fewer takers for high-end apartments.
Also high rents have forced many companies to move out of appartments. Nearly 130 flats in Hiranandani Complex, Powai, are gathering dust after Lehman Brothers went bust last year.
In the past few months, residential lease rates have fallen 25-30 per cent between Bandra and Malad and up to 25 per cent between Colaba and Sion/Mahim.
Brokers expect a further downturn of 10-15 per cent as property owners realign expectations with market dynamics.
Rents have corrected by about 5-10 per cent in the low-budget segment between Malad and Borivli and in the central suburbs from Sion to Thane and Navi Mumbai.
"The number of apartments available for lease is more than double the number available last year," said Mahesh Ahuja of Aruba Homes Pvt Ltd.
"Vacancy levels have ballooned due to cost-cutting. Most companies now prefer to relocate to affordable locations.
Flatowners who have understood this seismic shift have scaled down their expectations so that they can continue to pay their EMIs."
In Bandra, owners of 4BHK apartments are accepting Rs3-3.5 lakh as rent against their earlier expectation of Rs4-4.5 lakh. Powai, which has a large number of investor-owned flats, is badly hit with rents plunging to Rs1.5-2 lakh from Rs2.5-3 lakh.
Rajiv Jain of Jaisons Property Management, a real-estate broking company dealing only in high-end residential apartments, said, "Rates are now comparable to 2005-06 levels. Expats are relocating further away for cheaper rates in suburbs. I recently leased out a 3BHK in Juhu for Rs2 lakh while a flat in the same building was earlier leased at Rs2.5 lakh." A fallout: Jain's income has dropped 40 per cent.
Ram Prasad Padhi of Pinnacle Realty, who recently leased a flat in Oberoi Woods, Goregaon, to an expat for Rs30,000, said, "In better times, her budget would have been Rs60,000 and she would have been looking at options in Bandra. But this time, she made it clear she could not afford to stretch her wallet beyond Rs35,000."
