Why are rental yields so low in Mumbai?

My Answer on Quora


Bombay is the city that doesn’t sleep but yet is the City of Dreams, The Real Estate sector is an paradox in itself.
Lets assume the average cost of a 1000 sq feet Apartment is 1 Cr, This is how the numbers play our for the Flat Owner.

If inflation crosses 10%,then your home loan (assuming at 10%) is virtually squared off.
So the game is not about 3% (rental income), Its about owning a property costing 1 Crore for 5.82 lakhs, even a 10% appreciation would see an investment appreciation of at least 80%.

In Bombay everything is a risk, but as Gordon Gekko tellsĀ  “It’s not about the money, it’s about the game.”