Luxury apartment owners in Mumbai hit by high local taxes and dipping rental prices

Luxury apartment owners in Mumbai hit by high local taxes and dipping rental prices

Investors who purchased a luxury apartment in Mumbai city are currently seeing grim times as rent prices have fallen dramatically in several areas of the city. In addition to rental prices seeing a dip, the value of the property has also depreciated in several cases. 

Some estimates mention that the average rent in luxury apartments have fallen by 20-30%. The report mentions that a 5BHK home in Worli that would usually fetch a rent of up to Rs 4,50,000 per month will only get Rs 2,00,000 after multiple deductions including 22% rental income tax.

Describing the haste with which builders are selling off their property, it is said that some even have their standard agreements ready so that a willing buyer can sign and move into the property immediately. 

One of the major factors in the falling rental prices is the fact that there are several new luxury apartments currently operating in the city, which means the supply is currently outpacing demand. A central Mumbai property broker said that rental prices have fallen by at least 20% in the region. 

On the bright side, this brings great news to those seeking to move into luxury and lavish apartments in the city as rental prices are quite low now. However, if you’re seeking to buy an apartment only to rent it out elsewhere, the returns may not be pleasing as we discussed above. Despite the dip in rental prices of luxury apartments, a property consultant in Bandra-Khar mentioned that demand for 1-2 BHK housing is still pretty high in the area.

Meanwhile, the Brihanmumbai Municipal Corporation (BMC) recently announced that it won’t collect property taxes from properties of below 500 sq ft. However, the authorities failed to clarify if this will also include properties that touch the 500 sq ft mark. This was also an election campaign promise by Shiv Sena leader and Maharashtra Chief Minister Uddhav Thackeray.