MUMBAI: A shanty in Dharavi is fetching a price of over Rs 1 crore, and real estate prices in Asia's second-largest slum cluster are beating those in posh central Mumbai areas like Lower Parel.
Sample this: an 80-sq ft house in Dharavi costs upwards of Rs 25 lakh today, which is over 31,000 per sq ft, while Lodha had recently launched a new project in Lower Parel at Rs 23,000-25,000 per sq ft. In a market where sales of apartments have slowed down significantly, especially in south and central Mumbai, property sales in this slum cluster in central Mumbai have gone well and prices have doubled in the last couple of years.
Take the example of Amrish Devaliya who listed his 450-sq ft Mumbai home on a popular property portal last month. His asking price was 1 crore, but now he's hoping to get much more. Devaliya's property isn't located in one of Mumbai's many middle-class hubs, but a shanty inside Dharavi, where property prices have been on the rise over the past few years.
While the rest of the city battles falling home sales which are down 50% from the peak of June 2009 and a huge inventory pile-up of 40 months (139.33 million sq ft as of March 31, 2013, according to property research firm Liases Foras), this 427-acre slum, home to lakhs of labour that serves the Maximum City, has stood out, thanks to continuing high demand for comparatively 'cheaper' homes by an immigrant labour force which caters to the city as domestic help, plumbers, daily wagers, other office workers or those who run micro businesses. A healthy market usually maintains an inventory of around eight months.
Syed Kausar Vazir, a real estate agent based in Mahim, receives around 10-12 enquiries from buyers for properties in Dharavi every day. "Around 50% of these enquiries translate into deals and are finalised," he says.
Another broker, Moosa Sayad, who owns Aman Estate Agency on the 90-ft road near the slum, says he gets around 15 enquiries daily. "The deals may not happen the same day, they take time, but there's certainly a buzz," he says.
What's made Dharavi more attractive is the possibility of regularisation and redevelopment as per a 1998 plan. Add to that, the slum's central location in a stretched city. "A shanty measuring 12 ft by 35 ft can fetch a price of Rs 1-1.5 crore," says Vazir. The premium for a house is determined by its proximity to the main road or the railway station, he explains.
"Dharavi has its own rules and regulations, though. It can have its own 'Dharavi realty index'," adds Mona Jalota, head of international project marketing and regal homes at international property advisory firm Knight Frank. Smaller the house, bigger the premium here. A small 42-sq ft shanty in Azad Nagar No 1 of Dharavi can fetch anywhere between Rs 15-20 lakh. "And here, there's no 'funda' for pricing. The owner decides the value of his house, and the buyer decides whether to pay or not," says Sayad.
Prices of houses, which have tin or wooden roofs, or sometimes slightly better with brick structures, but no attached bathrooms, have more than doubled in the last two years. Typically, deals for these homes are struck by the roadside. If you are on the lookout for a house here, you could be accosted by a so-called real estate agent at the corner of a street. These agents scour the streets, looking for buyers and sellers and most of them don't even have a registered office: they get 2% of the deal size as commission in return for their services.
Many of the rules that govern the rest of the city's real estate do not apply to properties here. For instance, there's no formal registration of properties and no stamp duty. All deals are based on power of attorneys, sale agreements and a no-objection certificate.