Flats are truly a depreciating asset or more.
-
In a city like Mumbai, I feel we’re oversimplifying things by calling flats "depreciating assets." While the building may lose value, isn’t the increasing land value and potential for redevelopment the key? Are we missing the bigger picture by not separating the physical building from the location's appreciation?
-
You're right, Mumbai flats aren't purely depreciating. The value actually comes from a mix of the land price and the cost of building, minus any depreciation. Sure, buildings get older and may lose some value, but the land itself tends to appreciate by about 8-12% each year. Plus, there are policies that help with redevelopment, making it a solid investment.
Smart investors know to consider land and buildings separately. The land appreciates while the building might wear down, but as long as you have a good location, you can still do really well.