It seems as though trouble is brewing in the luxury real estate market in Mumbai.

Demand from local investors has died down dramatically, and now even the Non-Resident Indians or NRI’s who were major investors in such luxury properties, are cooling off. NRI’s are expecting property rates to go lower, just as the US property market is currently witnessing major changes due to the subprime crisis.

Until around four to five years ago, there were just a few developers who were involved with building luxury homes. However many others joined in, due to the higher margins involved.  These developers entered the luxury sector, without a proper analysis or assessment. Thus now they face an imbalance between demand and supply. In the suburbs of Mumbai, the supply outstrips the demand. In fact it is estimated by Jones Lang LaSalle, real estate consultancy firm, that supply exceeds demand by nearly 25 to 35%.

The NRI investors comprised of nearly 20% of luxury home buyers. And these numbers have dropped. The drop in numbers does not look good for the luxury realty market in Mumbai. Moreover, multiple developers seem to be attracting the same NRI segment. Developers are linking up with banks, who have a list of high net potential people, and are offering them freebies such as free round trip tickets to India, in order to take a look at their properties.

At such times, it makes more sense to attract people of Indian origin. PIO’s are those generation of people, whose forefathers migrated during the British reign, and are now settled abroad. There is a considerable number of PIO’s in Australia, Africa, the UK etc.

In spite of the doom and gloom surrounding the financial markets these days, luxury property in London seems to be excluded from the damage. I mean – let’s face it, Merrill Lynch and Bear Sterns’ executives  still got their year-end bonuses even if the investors lost their shirts.

A flat in St. James’ square, London this week sold for the record price of (more than) $230 million, twelve milliseconds after planning permission was approved. The flat is to be one of only six in a 1930’s office block. Each floor of the building will be used to create one single flat.

The main reason for the price seems to be the fact that this is an extremely unusual opportunity. The last time a new flat was available in the square, which lies within walking distance of Buckingham Palace was eight years ago.

Apparently, the company has now sold four of the six flats, so interested buyers need to get a move on. The local council was paid off with a payment of nearly $8 million towards affordable housing in the borough. Despite opposition due to the fact that a private bar is planned for the ground floor. What is the world coming to? A bar in St. James’ square. What next – a discothèque?

Having spent a little time in Venice (Italy) I have to say this bed would not be out of place amongst the Doge’s furniture collection., although I pity the delivery drivers.

Hand crafted and decorated with your choice of silver or gold leaf, the Phyllis Morris Grande Venetian is the West Hollywood luxury furniture makers best seller. The bed measures a stately 12 foot by 10 foot, with Corinthian columns at each corner. Phyllis Morris has been creating furniture for over fifty years in their Los Angeles workshop. All furniture is made by hand to your specifications, and they describe themselves as “Furniture Couture.”

The company’s motto is “Live well.”

Phyllis Morris