After seven months of dwindling real estate sales in Mumbai leading up to the end of October this year, Mumbai has now lost all hope for a market revival after terrorists attack late last month, that claimed 195 lives.
By targeting wealthy Westerners, industrious, wealthy and hardworking citizens of Mumbai, the terrorists managed to grind the economy to a total standstill.
What was previously considered the second most expensive office market worldwide might soon be a property graveyard if we are to believe the latest news reports from Bloomberg. As developers try to protect themselves against oversupply, investors are already fleeing the city due to security concerns.
Many corporate companies will no doubt re-evaluate whether it is worth doing business in Mumbai for safety reasons. Saving dollars and risking lives is most likely not on the agenda of any corporation.
Mumbai accounts for a substantial proportion of India’s taxes (30 percent), leaving fear in the market place about how this gruesome event will affect the Indian economy as a whole. It is clear though that at this moment, many have been subdued by the sudden turn of events.
With one of the highest rental costs in the world, many home owners might have to correct prices to attract renters to assure cash flow during the slower times. To make matters worse, there has been a year on year drop in buyer registration by 35 percent from October 2007 to 2008, as demand for new housing is falling rapidly.
These figures already indicate trouble brewing and now with the latest terrorist attacks, things seem to be getting worse still.
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