The cheer is back in the Mumbai real estate market now as per reports with growing sales volumes and higher optimism in the market. Latest reports have clearly outlined how residential sales volumes have grown considerably across both Pune and the MMR (Mumbai Metropolitan Region). The costliest property market in India, Mumbai, witnessed growth of 22% in sales figures for 2019 until now in spite of the slow recovery of the housing market and the ongoing liquidity crunch. Home sales have increased by the highest percentage in a period of 4 years in Mumbai as per several reports.
Real estate developers have already shifted focus towards coming up with more affordable apartment units for buyers and this may have spurred sales growth in spite of numerous market limitations. Mumbai has witnessed steady real estate growth at a time when the slowdown in the market has impacted recovery across most of India’s top 7 cities for real estate.
Key aspects to be noted
Macrotech Developers, the famed Trump Tower development partner in Mumbai, is already venturing into low-cost homes as is Godrej Properties, one of the country’s premier realty players controlled by the family of billionaire Adi Godrej. Developers are now foraying into more affordable units with the credit crunch squashing demand for luxury and premium housing units. New starts also went up by a handsome 21% across the top 7 cities in India driven majorly by affordable housing. This also indicates the revival of pent-up housing demand in the entry-level and mid-income categories as per reports.
Experts believe that the MMR (Mumbai Metropolitan Region) witnessed the highest supply levels of housing in the affordable segment which is an unusual phenomenon for this particular market. Mumbai’s heartening sales performance in 2019 was also spurred by the conscious decision taken by real estate developers to fill up the gap between demand and supply. However, growth in housing unit sales has come down to 5% overall for the country with the market still recovering from the impact of back to back developments including demonetization, GST, RERA and the ongoing liquidity crunch.
The liquidity crunch has impacted the performance of the housing market which has been further accelerated by the economic slump that is affecting demand for goods and services. Housing sales figures increased by 17.6% across India’s top 7 cities in 2018 as per reports although the economic fluctuations have reduced growth this year.
Some of the other market trends worth knowing
Residential sales figures went up by the highest margin for 2019 across Pune and MMR as mentioned while sales volumes came down in markets like Hyderabad, Bangalore and Kolkata. Affordable housing witnessed steady growth this year with 22% growth (year-on-year) in supply of these units this year. Unsold housing inventory came down by 4% to stand at 648,000 units in total. Average residential property prices across India’s major cities went up by approximately 1% this year with the NCR (National Capital Region) and Kolkata as exceptions. In both these markets, property prices remained at the same levels.
The Government’s mission of rescuing stalled housing projects will bring relief to innumerable home buyers while also enabling faster recovery for the housing sector. The Government has already announced a $3.5 billion or approximately Rs. 250 billion fund for the revival of stalled residential real estate projects across the country. According to experts, Government measures, sops and lower home loan interest rates will keep affordable and mid-income demand steady throughout 2020 and buying sentiments will start picking up rapidly from H2 2020 onwards. A majority of residential housing growth may be witnessed in the second half of the year after a pick-up in demand and better liquidity in the market.
Luxury home prices may come down by 1% in Mumbai
Prices of luxury properties in Mumbai may reduce by 1% in Mumbai, the costliest property market in India, next year. The slight decline in luxury property prices in 2020 will lead to higher demand in this category which may be good news for developers of prime properties in the city. Investors will naturally be eyeing prime areas such as Lower Parel, Cuffe Parade, Napean Sea Road, Worli, Juhu, Tardeo, Santacruz (West), Bandra (West), BKC (Bandra-Kurla Complex), Prabhadevi and Khar (West) since properties will be slightly cheaper here in 2020.
Buyers will remain more cautious with regard to buying luxury property in Mumbai in 2020 due to the extra 1% stamp duty imposed by the Maharashtra Government. Prime property prices have actually gone up by 12.7% in Mumbai over the last 10 years or so as per reports. Supply of luxury housing homes may come down in 2020 for Mumbai which may spark subsequent price growth in turn. Average capital values stand at approximately Rs. 64,775 per sq. ft. for prime property in Mumbai which makes it the costliest city to purchase a luxury home in India.