- Despite positive sentiments during Jul-Sep 2016, sales volume remained modest and average weighted prices continued to be under pressure in MMR. The growing unsold stockpile and numerous project delays distressed the market.
- Beating the overall blues, Jogeshwari (East) witnessed a seven percent hike owing to competitive prices and enhanced connectivity via Jogeshwari North flyover.
- The strategic location of Kanjurmarg (East) in Central Mumbai suburbs coupled with its proximity to transit routes and corporate hubs, pushed median capital prices up by five percent, QoQ.
- Mazgaon scored a five percent quarterly hike due to healthy demand from working and student populace.
- While the commercial market and the housing demand in MMR witnessed a boom, the rental rates did not show noticeable surge in ‘ask’ rates, YoY.
- Bandra (East), backed by the demand generated from Bandra Kurla Complex (BKC), saw rental values surging by 13 percent, YoY.
- Thakur Village, too, witnessed a double-digit growth in average rents as several residential societies commanded a higher price with each quarter. Seamless social and physical infrastructure has been a growth driver for the locality, too.
- Mira Bhayander and Dahisar benefitted on account of the rising demand for properties close to corporate hubs and important connectivity junctions.
- A marked improvement in sales volume and new project launches in Navi Mumbai in H1 2016 failed to translate into a corresponding rise in average weighted prices. Navi Mumbai, thus, recorded no change in overall capital values, QoQ.
- The primary grossers on the capital graph were localities that have a promising future owing to large-scale infrastructural projects and commercial growth.
- Belapur, Navi Mumbai’s central business district (CBD), caught the attention of several developers planning to monetise on the industrial belt. This propelled a four percent rise in capital values, QoQ.
- Localities such as Vashi, Ghansoli and Koperkhairane reported a quarterly capital growth of two percent, each, on the back of infrastructure expansion such as freeways, airport construction and the establishment of educational institutes.
- Navi Mumbai’s rental landscape felt the ripple effect of the commercial expansion and upcoming Kopra-Panvel airport, resulting in a six percent rise in average lease rates in Jul-Sep 2016 compared to the same period a year ago.
- Affordability, proximity to corporate hubs and a variety of housing options continued to attract the tenant community to localities such as Kalamboli and Taloja, where rentals appreciated by 11 and 14 percent, respectively, in a year.
- Ulwe and Vashi recorded an eight percent rental hike, each. Fresh demand percolated in these micro-markets post the announcement of Navi Mumbai Smart City project and ongoing tendering for the upcoming airport.
- Civic issues and poor planning triggered a four percent drop in median rental values in New Panvel, YoY.
Thane and Beyond
- Demand-supply disequilibrium, high ‘ask’ rates and withdrawn consumer sentiments led Thane to register a fall in median capital values in Jul-Sep 2016. More than half of the localities in the zone either witnessed stagnancy or saw prices moving downwards.
- Charai, Kalyan (East) and Vasind led the capital graph with a rise of six, four and three percent, respectively. Competitive prices and strengthened connectivity have been the primary growth drivers for these locales.
- Median capital prices witnessed a downtrend in Mumbra and Neral, by up to 12 and six percent, respectively, over the last two quarters. While Mumbra suffered on account of civic infrastructure woes and poor quality of construction, Neral reported an oversupply of residential units.
- Rental market mirrored similar sentiments as the previous quarter, with a two percent uptrend in median rental prices YoY. Competitively priced and well-connected micro-markets steered the rental landscape on a growth track.
- Ghodbunder Road and Majiwada emerged as the most favoured housing belts for rental accommodations, with 11 and 10 percent increment in lease values, YoY.
- The availability of affordable luxury projects and proliferation of IT companies along the Thane-Belapur industrial belt raised demand from the tenants, particularly in locales such as Kalyan (West), Waghbil and Dombivli (East).
- Ambernath and Teen Haath Naka grappled with water scarcity and poor road network, and saw prices depreciating by six and four percent, respectively.
Demand and Supply Analysis
Mumbai continues to reel under the pressures of demand-supply disequilibrium with a perceptible difference between the homebuyers’ preferences and developers’ vision pertaining to the unit sizes and budget categories. This persists to add weight to the already soaring unsold inventory in the city, with the premium and luxury projects finding few takers in the market.
- The popularity of residential apartments continues unabated, standing at 95 percent, inching up slightly, over the last two quarters.
- Availability of apartments stood at 97 percent in Jul-Sep 2016, reiterating the attractiveness of this housing format among the residents.
- Conforming to the previous quarters, the other property types witnessed negligible demand and supply, ranging between one and three percent.
- Supply of residential plots continued to be concentrated in the fringes of Thane and Navi Mumbai.
- Mumbai posted a shortfall in supply of affordable homes. While demand for homes priced within Rs 40 lakh rose to 40 percent in Jul-Sep 2016, supply remained unchanged at 23 percent.
- Mid-income housing (Rs 40-60 lakh) also saw a six percent shortfall in supply, highlighting the need for lower-ticket sized homes in the city.
- There was an oversupply of properties priced above Rs 60 lakh. High-income housing reported the largest gap of 12 percent in demand and supply. Developers’ preference towards high-end projects led to this disequilibrium. However, reduced interest from investors triggered by low market sentiments resulted in a rise in vacancy levels of such projects.
- Homes configured as 1BHK and 2BHK units garnered maximum interest from home buyers.
- Reduced margins dissuaded developers from launching projects offering 1BHK apartments. There was a 17 percent shortfall in supply of these units. Thane supplied the maximum 1BHK units, at almost 45 percent in Jul-Sep 2016.
- Supply of 2BHK and 3BHK units exceeded their demand by seven and eight percent, respectively. The two configurations are preferred exceptionally by developers in Mumbai and Navi Mumbai. The dominance of nuclear families in MMR could be the factor supporting the trend.
- Flats configured as 4BHK units continue to be the least popular and supplied segment across all top metros.
- Inventory overhang in the under-construction segment was perceptible in Jul-Sep 2016, with 18 percent excess supply. The availability of such units was evenly distributed across all zones.
- Buyers’ preference for ready-to-move-in homes was reiterated in the quarter, with over 85 percent demand for such units. Navi Mumbai saw a marked increase of six percent in the supply of ready inventory.
- Supply of ready-to-move-in units remained 18 percent lower than demand. This calls for the developer community to deliver projects in time and reinstate consumer confidence in the real estate sector.