Mumbai's Alibag a hotspot for the rich

Alibag is one of the traditional weekend-getaway destinations for residents of Mumbai. Since the late 1990s, it has emerged as a second home destination. Apart from its proximity to Mumbai, many other factors make Alibag an attractive second home destination.

These include the availability of seashore and the possibility of unwinding in low-density housing in natural environs, which is not possible within Mumbai. About, 90 per cent of the catchment belongs to Mumbai, while around 10 per cent belongs to Pune. Alibag's homeowner corpus has a heavy contingent of HNIs, NRIs and public personalities like industrialists and film and theatre artists.

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The real estate market in Alibag picked up on a modest note in the 1990s, primarily with plotted residential developments. However, in the last two years, a few projects offering villa/ bungalow type developments have also sprung up.

A major part of the development is being undertaken by the Samira Habitats Group, which contributes to about 90 per cent of the total market share. Some of their initial projects were Samira Palms, Samira Woods and Samira Complex. The land prices in Alibag vary drastically. Vicinity to the sea and the highway put plots in the prime category, with prices to match.

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A plotted property with a sea view can easily exceed Rs  6-10 crore/acre (Rs 60-100 million/acre), while agricultural properties in the hinterland would cost Rs 80 lakh to 2.5 crore/acre (Rs 25 million/acre). There are many plotted schemes by the aforementioned developers in this region, with sizes varying from 1,000-5,000 sq ft.

The prices for such plots range from Rs 400-2,000/sq ft, depending on the view, access roads, infrastructure, etc. Plots between Murbad and Alibag are expected to appreciate by 200 per cent, going forward. Alibag is predominantly an investor market with few end users.

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To provide a sense of the growth in this market, plots which were selling at Rs 250-300/sq ft in 2006-07 are now selling at Rs 1,200-2,000/sq ft. In other words, property values in Alibag have more-than-doubled over the last three years; albeit much of this growth being ascribed to speculation and investment.

The fact that the Nhava-Sheva Sea Link has not happened - nor is it likely in the foreseeable future - and the lack of good connectivity have already begun impacting sentiments.

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Property prices there have reached high levels largely on the power of speculation - a driver which has never displayed much staying power on the property market. There is every likelihood of stabilisation and even rationalisation of property prices in Alibag in the mid-term.

The writer is Head - Strategic consulting (West) Jones Lang LaSalle India