Mind-Boggling Real Estate of Mumbai!

I am not sure if it was present from earlier, or I started closely analysing the market since then; but I feel that real estate atleast in Mumbai has boomed & blossomed in last few years. I dont remember people talking about home deals in crores of rupees than. But, nowadays, a house coming for less than a crore rupees is a very nice deal! It is quite amusing and confusing how did so much money come to people all of a sudden, and also real estate market outpacing all the conventions of standard markets. It has become synonymous with abnormal profits!

I was trying to figure out a rough value of simply houses in Mumbai. Here are the assumptions:

The total area of Mumbai is 603.4 km² (233 sq mi). Of this, the island city spans 67.79 km² (26 sq mi), while the suburban district spans 370 km² (143 sq mi), together accounting for 437.71 km² (169 sq mi) under the administration of Brihanmumbai Municipal Corporation (BMC). The remaining area belongs to Defence, Mumbai Port Trust, Atomic Energy Commission and Borivali National Park, which are out of the jurisdiction of the BMC.

So, around 437 sq. km or 169 sq miles of area comes under BMC. 169 sq. miles roughly equals to 4,711,449,600 sq. ft. We shall assume only 4,000,000,000 sq. ft for our calculations.

Further assuming, buildings (including residential and commercial) are built on 50% of area of Mumbai. Rest is covered by roads, highways, railways, parking areas, grounds, slums, waste lands, dumping rounds etc. This leaves us with an area of approximately 2,000,000,000 sq. ft. covered by buildings.

Now, length of buildings is variable. Not considering the under construction India tower of 125 floors the largest building in Mumbai is Imperial towers of 60 storeys. We shall take the average length of buildings as 3 floors. So, the total available land under buildings is 6,000,000,000 sq. ft.

Now, the price of real estate in Mumbai ranges from Rs. 6000/ sq. ft to as high as Rs. 65,000 psf. Although, it has become very difficult to find a home priced at Rs. 8000 psf., we might still consider that price as price to find out the total value of real estate in Mumbai.

Hold your breath!!!!

The total value of real estate in Mumbai comes to a STAGGERING

48,000,000,000,000 Indian Rupees!!

In words: 48 Trillion Indian Rupees.

In USD (@48Rs per 1 USD): 1,000,000,000,000

In words: 1 trillion US$

For some comparisons:

US GDP (as well as US debt) is 15 trillion $

India's 2010 GDP was 1.5 trillion US$

Australian GDP is 1.2 trillion

Pakistan GDP is 174 billion US$

If you remove the top 3 African countries, than the total GDP of remaining 50 African countries roughly equals to that of worth of Mumbai's real estate!

This is a VERY VERY conservative calculations. I could not get hand to actual data.

I know it would not be appropriate, still if you add the following facts:

• Mumbai accounts for 16% of income tax collections and 35% of corporate tax collection in the country.
• Mumbai accounts for 25% of the State's income at current prices.
• 66% of the sales tax revenue in Maharashtra originated in Mumbai.
• Mumbai is home to both the National Stock Exchange and the Bombay Stock Exchange and dominated the turnover and total market capitalization of the Indian stock markets. The share of these two exchanges is about 92% with respect to the total turnover. They represent virtually the total market capitalization of India's corporate sector.
• Contributes 30% of customs duty.
• Mumbai handles 26% of the domestic air traffic cargo and an average of40%of the international air cargo traffic in country and about 25% of the domestic and 38% of the International air passenger traffic in the country.
• The number of telephone connection in Mumbai is estimated to be approximately 2.31 million. Of the approximately 7 million cellular subscribers in India, 10% of the subscribers are believed to be in Mumbai.
• 2.5 million tax assesses.
• Mumbai accounts for a significant share in deposits mobilization (14% of total deposits) and deployment of credit (21% of total credit) of scheduled commercial banks.
• Mumbai accounts for almost 30% of Foreign Direct Investment (FDI) in the State.
• Handles over 35% of cheque clearances in number and 60% in value, more than 10 times that of any other metro.

I dont know how sustainable are these numbers, whether it is overpriced, under-priced, actual or virtual (like Facebook).

^{All I can say is.... THIS IS MIND BOGGLING!!!! For me, It is Amusing and Confusing :)}