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.
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