It's the story of Bombay and Mumbai. As the city got divided into those who made fortunes and the rest who were still renting, the realty landscape too underwent an overhaul.
It is almost two decades, post liberalisation since the Indian property boom story began. Since 1996, average house prices have risen by almost 300 percent across Maharashtra, while in Mumbai alone, the figure is close to 600 percent, according to House Price Index. Such enormous increase in prices have definitely benefited the buy-to-let landlords, who have earned returns of at least Rs 20,000 for each Rs 1000 they invested 20 years ago.
Yet, it remains a fact that very few of the people who had invested into properties years ago would have analysed the huge financial impact their decisions would have on their future. We spoke to some of those people who purchased their property; rented those out and then looked at re-investing once again. This is also a tale of Bombay and Mumbai, where some have made a million bucks, while some regretted their decisions made years ago.
In 1996, 64-year-old Meera Rao, a city-based professor invested into a three-BHK apartment in Lokhandwala, Andheri for around Rs 30 lakh. She and her husband paid for it partly by cash and bankloan. After a couple of years, they moved to the US. Meanwhile, they rented the flat out for Rs 25,000 per month.
After a five-year stint in the US, they returned to the same apartment. The apartment is now worth Rs 2.5 crore. "It's really amazing, the way prices have multiplied over the years. We started off our first stage of investment, with a Rs five-lakh down-payment. We managed the rest with our savings and loan. And now several years down the line, we realise that was the best decision we had taken," says Rao.
In 1996, 42-year-old Jay Bhatia, an advocate with Bombay High Court invested into a land in Vashi. He paid around Rs four lakh for the same from internal funding. In a few years, he was moving overseas with his family for a work opportunity. In around 2007, he sold off the land for Rs 3 crore. "We didn't think so much then. Selling it seemed wise. I regret it today because the same land is now worth around Rs 10 crore!" says Bhatia.
Experts feel any kind of gain or loss is also notional and not absolute. "People who sold off any property midway at a seemingly lesser price have still received a significant appreciation in value. They might have needed that money at that point of time. And any high price appreciation, post that, does not really matter to them," says Pankaj Renjhen, MD (retail services) of Jones Lang La Salle.
In 1996, 62-year-old Rajesh Goswami, an ex-banker bought a small 1-BHK apartment in the heart of Malabar Hill for around Rs 75 lakh, which is now worth Rs three crore.
"Mumbai is full of discerning customers who totally know when to invest and where to invest. The economy back in the mid-90s was different from what it is now. Hence, people who invested into property back in 1996 and never sold off are now definitely sitting on a goldmine," says Boman Irani, chairman, Rustomjee Group. Bombay has essentially transformed into Mumbai, over the years, and people, living here, completely vouch for it. And the tales of two completely distinct times have now merged as one single evolving reality.