Why are rental yields so low in Mumbai?

My Answer on Quora

http://www.quora.com/Mumbai-Maharashtra-India-2/Why-are-rental-yields-so-low-in-Mumbai

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 tells "It's not about the money, it's about the game."