Apr-Jun 2022 Mumbai Real Estate Market Report
TheApr. June2022quartersawtheMumbairealestatemarketcontinuetorisefavorably. Homebuyersinthehousingmarketmaintainedtheircomposureinthefaceofrising reckonerrates&stampduty.Inaddition,despiteincreasedinputcosts,developersdidnot permitpropertyvaluestorise.
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Mumbai'shousingmarketshowedoptimismintheApriltoJune2022quarter,with residentialsalesincreasingbyroughly10%QoQ.Housingsalesmomentumwasconsistent QoQ,unaffectedbytheincreaseinreadyreckonerrates,stamptax,andreporates.The numberofinquiriesincreasedsteadily,primarilyfor1BHK&2BHKapartments.Despite increasedinputcosts,themajorityofdeveloperstookaflexibleapproachonhomevalues, whichwasencouraging.
Mumbaimaintaineditsleadintermsofnewreleases,accountingformorethan50%ofthe totalsupplyacrossthesevenmetropolisesandshowinganincreaseof8%initssharefrom thepreviousquarter.InQ22022,theMaharashtraRealEstateRegulatoryAuthority (MahaRERA)registeredabout400new(includingphases)andrefurbishedhousing societies,representinganincreaseofroughly80%QoQ.PrestigeGroup,Arihant Superstructures,andMahavirBuildcon,amongothers,announcedresidentialprojectsthat eachincludedmorethan100homes.Forthesecondconsecutiveyearin2022,therewere morethanalakhitemsintheunsoldinventory.
Key micro-markets across budget segments Budget Range Localities Average Property Prices Average Rental Rates Rental Yield WithinRs40 lakh Ambernath 4,100 5,000 10 2.37% Badlapur 3,650 4,350 8 2.42% Rs40lakh Rs1 crore Kharghar 9,050 11,000 20 2.34% Dombivli(East) 5,900 7,200 13 2.50% Ulwe 8,000 9,300 11 1.35% Rs1croreand above Manpada 12,700-15,000 27 2.49% Goregaon(East) 17,300-22,200 44 2.73% Borivali(East) 16,900 19,450 36 2.31% Withbusinessesreopeningandemployeesreturningtotheirworkplaces,Mumbai'srental demandincreasedby10%inthestudiedquartercomparedtothesameperiodin2021. However,limitedsupply,particularlyinwell knownmicro marketslikePowai&Wadala, tonameafew,causedariseinrentalsofroughly2 4percent. Important micromarkets in BHK arrangements Configuration Localities Average Unit Size Average Property Prices 1BHK Dombivli(East) 500-600 5,900-7,200 Panvel 520 550 6,950 8,750 2BHK Kharghar 800 950 9,050 11,000 Majiwada 850 1000 11,950 13,550 Kalyan(West) 980 1020 6,600 7,850 3BHK Manpada 1100 1350 12,700 15,000 Goregaon(East) 1300 1400 17,300 22,200 Borivali(East) 1200 1400 16,900 19,450
Industry Movers
Tax registrations and collection are at an all time high.
Asmorethan21,000residentialunitswereregisteredinAprilandMay2022,thenumber ofpropertyregistrationsinMumbaiincreased.Inspiteofchangestostampduty&ready reckonerrates,therewere78percentmoredealsinMay2022thanthepreviousmonth. Thecontinuedtrendofhomeownershipisalsoshownbythe10%YoYgrowthinproperty taxcollections.
Train connectivity is expanding
OnApril2,2022,thepubliccouldutilizethefirstphaseofMumbaiMetroLine2A (DahanukarWaditoUpperDahisar)&Line7(AareyColonytoDahisarEast).Bythe beginningofnextyear,phase2oftheselinesisanticipatedtobeoperating.Line2Awould connectDahisarEast,DNNagar,andAndheriWestinthesecondphase,whileLine7will linkAndheriandDahisarEast.Additionally,operationsontheMumbai AhmedabadBullet Trainareexpectedtobeginin2026thankstotheacquisitionof90%ofthenecessaryland.
The focus is on redevelopment
Whetheronprivateorpublicproperty,theSlumRehabilitationAuthority(SRA)hasgiven noticeforthewidespreaddeclarationofslumareas.However,asannouncedbyMHADA, onlyclusterrehabilitationprojectswouldbeapprovedacrossthelayoutsofthe MaharashtraHousing&AreaDevelopmentAuthority.TheRBIhasalsomadeitpossiblefor cooperativebankstoprovidefundingforself redevelopmentinitiatives.
Construction on the Navi Mumbai airport accelerates
TheNaviMumbaiInternationalAirport(NMIA)islocatedinsidea20-kilometerzonewhere theAirportsAuthorityofIndia(AAI)hassetaheightrestrictionof55metres(12 15 floors).The1,160hectaresofthemainairportareahavebeenremovedofover3,000 structures,affectingover10surroundingsettlements.
Outlook for Commercial Real Estate
Thecommercialsectorhasacceleratedasmoreofficescomeupandchooseamixedwork paradigm,andanumberofoccupierswanttoexpandtheirportfolios.Thetrendpersisted inMumbaiaswell,buttherewasstillashortageofGradeAofficespacethere,withover 15%ofthoseavailable.
Foraperiodoftenyears,HDFCBankleasedmorethan2.5lakhsquarefeetofofficespace intheMindspaceBusinessParkinAiroli,NaviMumbai.Arequestforproposals(EOI)for morethan50,000squarefeetofofficespaceatMumbai'sBandra KurlaComplex(BKC)was alsomadebytheReserveBankofIndia.
ForRs202crore,Polycabpurchasedtwofloorsandabout55,400squarefeetofoffice spaceinTheRubyTower,Dadar.ForRs188crore,NationalRealtyacquiredmorethan 1.60lakhsquarefeetofcommercialspaceintheiThinkprojectbyLodhaGroupinKolshet, Thane.
A1lakhsquarefootresearchanddevelopment(R&D)centrewillbebuiltbyMacrotech Developers&EncubeEthicals,anintegratedpharmaceuticalcompany,inPalava,closeto Mumbai.
Important Points: Navi Mumbai
HousingsalesinNaviMumbaidecreasedbyroughly10-15percentQoQinApr-Jun2022as thestampdutyexemptioncametoanendonMarch31,2022.However,QoQinquiriesrose byapproximately30 35percent,pointingtoanaccelerationofdevelopmentinthe upcomingquarters.Butthemonsoonseasoncanbeahindrance.Priceswereconstantfrom thepreviousquarterdespitedevelopersonlymakingmodestprofitsduetogrowing constructionexpenses.Negotiationsanddiscountswereplacerightaway,andsome buildersalsoofferedspecialAkshayaTritiyaofferslikegoldcoinsandsame day reservations.
Themajorityofpropertysales nearly65percent included2BHKunitswith700 800 squarefeetinapricerangeofRs65 85lakh.Therewasstillaneedforthemicromarketsin Panvel,NewPanvel,Kharghar,Taloja,Ulwe,&Ghansoli.Duetotheinherentfinancial flexibility,nearly60%ofthebuyerspickedhousingsocietiesthatwerestillunder development.
Intheanalyzedquarter,newreleasesinallzoneshadaNaviMumbaishareofabout15%. Inthequarter,morethan3,000newunitswereadded.InregionslikeTaloja,Panvel,and Kharghar,developersincludingMahavirBuildcon,KanakiaSpacesRealty,&Arihant Superstructuresannouncedprojects.Theunsoldstockincreasedbyaround5%to21,000 unitsduetothereduceddemandandimprovedsupply,andshouldbesoldinroughly16 quarters.
Important Points: Thane and Beyond
SalesintheanalyzedquarterwereconstantduetoaplentifulsupplyofgoodsinThane's micromarkets,witha20 25%increaseinclosuresanticipatedinthenextquarterduring theGanpatifestival.Thecitysawanincreaseininquiriesofalmost20%QoQ.Similarto otherareasofMumbai,developersinthisareawerewaryofchangingthepricing equilibrium,anddiscussionsgenerallyinvolvedtakingalumpsum roughlyRs1lakh off theentireprice.
Theunitswiththemosttractionwere1BHKand2BHKhomes,withsizesrangingfrom 400 450sqftto650 800sqft,respectively.InThane,thepricerangeofRs.45 75lakh attractedpurchasers'attentionthemost,butintheBeyondThaneregion,itwasRs.20 45 lakh.KolshetRoad,GhodbunderRoad,&HiranandaniEstatearepopularmicromarketsin Thane,whereasKalyan,Ambernath,Badlapur,&DombivliarepopularbeyondThane.
IntheThane&BeyondThaneregions,over7,000newunitswereaddedinQ22022. Projectswithmorethan100apartmentseachwerelaunchedbydeveloperssuch TerraformRealty,YogiDevelopers,&ArihantSuperstructures,amongothers.Inresponse toconsumerdemand,primarily1and2bedroomflatspricedbetweenRs75andRs85lakh inThane&Rs25toRs40lakhoutsideofThanewereintroduced.Asaresult,theunsold inventoryincreasedbyaround5%tonearly37,000pieces,anditmighttake20quartersto sellitall.
Thestudyquartersawanalmostthree foldincreaseinrentaldemand,withanaverage rentincreaseofaboutthreepercentQoQ.HiranandaniEstate,HiranandaniMeadows,Vijay Garden,Majiwada,TeenHathNaka,&ThaneCityshowedthehighestlevelsoftenant activity.Themostsought afterapartmentsbytenantscontinuetobethosewith1or2 bedrooms,withmonthlyrentsaveragingbetweenRs12,000and30,000.
Important Points: Mumbai
Despitetheriseinthereadyreckonerrate&metrocess,Mumbai'sresidentialmarket remainedstrong.Withover10,000transactionclosing,thesalesincreasedby10 15%QoQ. Duetodevelopers'attractivepaymentplans&valueincreases,inquiriesincreasedby about20%QoQ.Salesmomentumisanticipatedtopersistdespitemajorbanks'changesto reporate&homeloaninterestrates.Buildershavebeenhesitanttoimposeanycostson thecustomersduetothemarket'sextremepricesensitivity.Asaresult,theaverage propertypricesremainedsteadyfromthepreviousquarter,withnotabledemandinthe micromarketsofMiraRoad,Vasai,&Goregaon
Themostinterestwasseeninone bedroomapartmentswithanaveragesizeof350 450 squarefeet.MostbuyerswerebetweentherangesofRs60lakhtoRs1crore.Buyerseither choosereadyhomesorunder constructionprojectsbyreputabledevelopers.Asaresult, theresalemarketincreasedbyalmost10%quarteroverquarter.
Mumbaiadded241projectstoitsportfoliowithanincreaseinnewlaunchesofabout5%, includingphase wiselaunches,withbudgetsbetweenRs80lakhandRs2crore.Projects withover100unitseachwerelaunchedbyreputabledevelopersincludingPrestigeGroup, SunteckRealty,&GodrejProperties.Amovetowards2BHKunitswasobservedinthe marketaswork from homeopportunitiesincreased.Themostlaunchesoccurredat Byculla,Wadala,Vasai,&Mulund.AttheconclusionofthequarterinJune2022,theamount ofunsoldstockrosebyalmost5%to43,000units,anditwouldtakearoundayeartosell themall.
About4%YoYgrowthwasseenintherentalsector.Tenantscontinuedtochooseoneand twobedroomapartments,withmonthlyrentsaveragebetweenRs28,000andRs48,000.
Althoughthemarketforrentalsisanticipatedtoremainsteadyforawhile,thetrendis likelytowaneastenantsturntoresalehomes.
Conclusion
Mumbai'srealestatemarketremainedrobustdespitechangesinthesectorandanincrease inCOVIDcaseload.Althoughasteadygrowthmomentumcanbeprojected,risinginput costscouldcausedeveloperstocontinuetorunoutofmoneyinthefuturequarters.Site visits,propertysales,&rentalactivitymaymomentarilyslowdownwiththeimpending monsoon.Theincreaseinthereporatehasyettohaveaneffectonthemarket,andwhile manypurchasersmaywaititoutuntilinflationsubsides,therealincreaseintheEquated MonthlyInstalments(EMI)isnotsignificantenoughtoinfluencetheirchoicetopurchasea home.
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