What Is Common Between Mumbai And Sydney Real Estate?
Long gone are the times when cities such as New York or London used to be the least unaffordable property markets. As it stands today, major Asian and Australian cities have earned themselves the distinction of being among the least affordable property markets in the world. While each of these markets have their unique set of challenges and characteristics, there are many things they share in common, too. One could find many similarities between property markets of Mumbai and Sydney, for instance.
Prices hitting the roof
According to an Oxford Economics analysis of price-to-income ratio, it takes over 30 years for a household with the local median income to buy a 970-square-foot apartment in Mumbai. This makes property in India's financial capital among the least affordable in the world. In the Demographia International Housing Affordability Survey in 2016, Sydney was ranked the second least affordable property market among 29 cities that were tagged as severely unaffordable. At 12.2, Sydney's current median multiple "represents the poorest housing affordability ever recorded by the survey outside Hong Kong".
Also read: World's 5 Least Affordable Property Markets
Focus on supply
To make housing affordable in the two cities, authorities here are focusing on increasing the supply. According to PropTiger DataLabs, over 2,500 projects by private developers are coming up in Mumbai in the near future while there would be an estimated demand for seven lakh affordable housing units in the coming five years. “We are convinced if we put downwards pressure on prices through supply, that's the best way we can solve it as a state government,” New South Wales Premier Gladys Berejiklian was quoted by Bloomberg as saying. “There are about 100,000 dwellings we are behind on in terms of really digging into the demand," she added.
Long way to work
According to a report by The Daily Telegraph, "a third of working people in Sydney have return commutes to and from work of more than 90 minutes each day". This average commute time is much longer when compared to the average of major cities of America, the report adds, citing government data. According to an analysis of Indian cities by PayScale, a US-based remuneration tracking company, the average time spent in commuting by a worker in India's financial capital is 47.26 minutes.
Getting rich by paying a price
Australia and India are among the wealthiest nations in the world. According to New World Wealth, India is the seventh richest country in the world in terms of total individual wealth held after the US, China, Japan, Germany, the UK and France. On the other hand, the report ranked Australia the top country worldwide for millionaire inflows, "beating out traditional destinations such as the US and the UK". The riches of the two cities are, however, coming at a cost. Their position as global cities and the attractiveness of their property markets make it almost an impossible task to keep real estate in the two cities affordable.
The limited means
There is only so much land that could be used for developing real estate in both the cities. Even if authorities intend to, there is only so much they can do when it comes to housing supply. "Sydney is bordered by mountains to the west, the ocean to the east and rivers and national parks to the north and south, restricting the supply of new land, while moves to increase housing density in established suburbs have run into opposition from residents," says a Bloomberg report. Same is true of Mumbai, too. The island city is bound by the sea and the hills. Even the fringes could be extended only so far. Their geographical constraints are the root cause of the housing trouble of the two cities.
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