I have been following the Mumbai housing space since the recent move and have had a hard time understanding the different variables at play and how they influence the housing price here.
I tried to run a small experiment using 300+ houses-data points collected over a couple of weeks posted randomly. While not completely comprehensive, this gives a few pointers to help answer one question, is the rental price fair ?
Location vs Price Adjustments
Cheapest to Most Expensive(Top to Bottom)
The market should be determining the optimal price and the variables considered are LOCATION and other basic amenities/aspects. It’s a very basic modelling approach but can be improved based on feedback.
Understanding the numbers and how to come up with a price :
- The average single room flat costs Rs 18587 (Base Value). E.g the average house in Bandra will be Rs 16675 (Location Premium) + Rs 18587 (Base Value) = ~ Rs 35000
- The cost for sharing a room will be half of the estimated full room price.
- This average rental room is a boys only non-gated community housing with no furnishing and brokerage.
- Now adjust this price based on other amenities variable.
- Being a basic approach some variables behave counter-intuitively but choose simplicity for overall intuitive understanding.
- Caveat : Generated from user data and thereby some might be mis-leading but at an overall level is useful.
- The heat range conveys the breadth of price adjustments.
Let me know what you guys think and if there is something basic being missed or any other comments on this !!