MahaRERA expedites project registration
In a bid to speed up the registration process under RERA, the Appellate Authority has doubled the penalty charges to Rs 2 lakh or twice the registration fees, whichever is higher, subject to a ceiling of Rs 10 lakh.
MHADA and PCMC housing projects to cater EWS and LIG
PCMC and MHADA – Maharashtra’s housing bodies - have proposed new residential developments under which PCMC will primarily focus on slum dwellers, whereas, MHADA will reserve 35 percent of the units for EWS and LIG segments.
State limits issuance of building certificates
Maharashtra authority has announced a time bound issuance of various building approvals. While occupancy and commencement certificates will be granted within eight and 30 days respectively, plinth checking approvals will be issued in seven days.
BMC regulates lobby sizes
To curb the malpractice of expanding lobby areas and selling them for profits, Brihanmumbai Municipal Corporation (BMC) has proposed to standardise the size of lobby area.
BMC mandates redevelopment approval for old structures
To avoid accidents and collapses of the older constructions due to unauthorised alterations, BMC has made it mandatory for builders to seek redevelopment permission from the civic body. The body also intends to offer sops to buildings located in areas near the airport such as Kurla, Vile Parle, Ghatkopar and Santacruz.
Mumbai at a Glance
Mumbai underwent a sea change in real estate sentiment and demand-supply dynamics in the last two quarters. Progressive and reformative policies – RERA and GST – had a marked impact on the home buying sentiment in the city. It witnessed a paradigm shift in buyers’ preference from under-construction to ready-to-move and resale units. Consequently, sales volume claimed a huge leap with maximum deals getting materialised in the affordable housing segment along the fringes. The secondary luxury market was also testimony to a few big transactions in Jul-Sep 2017.
RERA put new launches on the back-burner as the developer community struggled with new rules and registration process with MahaRERA. Nonetheless, being the first State to launch a fully-functional RERA portal and a regulator to monitor the same, both Mumbai and Pune housing markets gained immensely. Out of the total projects approved across India, over 70 percent belong to Maharashtra. This instilled confidence in the buyer community and resulted in increased enquiries for RERA registered projects.
This time, developers refrained from offering huge discounts around Ganesh Chaturthi and started rolling out incentives for Navratras. This is speculated to propel sales volume in October 2017. Redevelopment plans for many co-operative societies are also expected to be a game changer, especially for the densely packed city-centers.
Moreover, a slew of infrastructure projects are likely to catalyse growth and open up new avenues in the peripheries. Top of the list projects include the proposed new international airport, internal six metro links, high-speed rail corridors, RO-RO ferry, Mumbai Trans Harbour Link and waterways connecting Borivali and Thane creek.
While under-construction units in Mumbai took a hit due to RERA and Goods and Services Tax (GST), increased demand for ready-to-move units ensured market vitality in Jul-Sep 2017. With marginal price correction, resale and possession-ready units with Occupation Certificate (OC) remained the prime choice for the cautious homebuyer community. Overall, sales volume improved on the back of genuine end-users, while stumped investors remained at bay.
- The average property prices in Mumbai inched up negligibly in Jul-Sep 2017 vis-à-vis the previous quarter. Over 70 percent of the tracked localities reported a positive capital price movement in the current quarter.
- New launches remained restricted as the builders remained busy in complying with RERA norms. However, the upcoming festive season is expected to see new project announcements as RERA registrations are likely to be completed by then. Besides, there will be clarity over GST’s impact on property prices, if any.
- Taking cognisance of improved demand for ready properties, many prospective hawkers, largely holding inventory priced within Rs 70 lakh – Rs 1.5 crore, listed properties on sale. This augured well for markets such as Borivali (East) and Versova which posted an average capital appreciation of six percent, QoQ. While Borivali (East) drew demand from mid-income homebuyers, Versova remained a popular choice for premium segment buyers.
- Following suit, Vikhroli (West) reported a five percent hike, QoQ, backed by its proximity to the commercial hub of Powai. Increased absorption from budget-conscious buyers, particularly working professionals, led to the said growth.
- While the capital market showed signs of improvement, the rental housing took precedence over it and reported a three percent hike in the average leasing values in Jul-Sep 2017, against the same quarter previous year.
- As demand outweighed supply, Mahalaxmi, an upscale market, registered an eight percent hike in the average rental values, YoY.
- Ghatkopar (West) also reported an eight percent increase in their annual leasing values. Replete with premium residential towers, the area has become a favoured belt for rental housing. Amongst other gainers are Kurla (East) and Mira Road, each scoring an average six percent growth in their weighted rental prices, YoY.
Boasting a rise of two percent in the average capital values, Navi Mumbai’s realty market reported a noticeable improvement in the home buying sentiment in the third quarter of 2017. Unlike Mumbai and Thane, buyers were interested in both ready-to-move and under-construction units. However, demand remained skewed towards reputed RERA registered builders.
- With new developments bursting at the seams, fringes in MMRDA’s ambit stirred maximum housing demand. As higher Floor Space Index (FSI) of four and faster approvals accelerated builders’ expansion in the peripheries, more enquiries and traction were reported in the quarter. The festive season is expected to witness increased conversions.
- Units configured as 2BHK with an approximate carpet area of 1000 sq ft and priced between Rs 65 lakh and Rs 1 crore gained high popularity. With nearly 15,000 such properties available in the market, ready-to-move units comprised a ballpark share of 18 percent, doling out hordes of options to buyers.
- Khanda Colony witnessed a four percent growth in average capital ‘asks’, QoQ. Host of infrastructure projects in the pipeline such as the International Airport at Ulwe and an Integrated Special Economic Zone coupled with proximity to Mumbai-Pune Expressway and NH-48 resulted in a positive buyer sentiment, better demand, consequently, a hike in property prices in the housing belt.
- Following suit, Karanjade and Khopoli also recorded a four percent spike in the weighted capital values, each, over the last two quarters. Located within a radius of 3 km from the airport, Karanjade remained a preferred housing destination backed by improved connectivity and presence of reputed builders, while Khopoli was on the homebuyers’ radar due to its affordable capital values averaging at Rs 3,300 per sq ft.
- Khargar, New Panvel and Palm Beach registered a price hike between one and five percent, QoQ. Home buying sentiment largely improved in comparison to the preceding quarter, however, an inclination towards rental units was evident, resulting in a four percent average growth in the leasing rates, YoY.
- An important node of CIDCO, Roadpali witnessed an 11 percent growth in the average annual rentals owing to the proposed Phase II of the metro project and proximity to the developed micro-markets of Kharghar and Taloja.
- With 10 percent hike in the average rentals, YoY, Kalamboli owed its growth to expanding industrial estate and strategic location (proximate to Mumbai- Pune Expressway and Sion-Panvel Highway). Rents in Ulwe and New Panvel also recorded an annual hike of 7-13 percent.
THANE AND BEYOND
Defying all odds, Thane’s real estate market displayed stability in Jul-Sep 2017, as a result of sustained demand for under-construction units. Accessibility to RERA-compliant projects, an array of choices and affordability added to the popularity of these units against ready-to-move and resale segments.
- Builders’ agility to register under RERA laid an investment ground for homebuyers, resulting in a marked improvement in sales during August and September 2017. Confident homebuyers were seen returning to the market with a strong appetite for unfinished units, as well.
- Being a popular Secondary Business District (SBD), housing sentiment in Thane was largely driven by working populace in BFSI and IT sectors.
- Approximately 60 percent of the tracked localities recorded a positive shift in their weighted capital prices, QoQ. Panch Pakhadi remained the bellwether with five percent growth in capital rates this quarter on the back of proximity to Eastern Express Highway, surplus inventory and sound infrastructure.
- Following suit, Neral, an affordable housing pocket with prices averaging at Rs 3,000 per sq ft, recorded four percent capital appreciation QoQ.
- Kapurbawadi continued to remain a top performer for second time in a row. Competitively priced apartments and proposed metro V project remained instrumental growth drivers, resulting in a three percent surge in capital values, QoQ.
- In line with the previous quarter, rental housing continued to outshine the capital market in Jul- Sep 2017 and recorded three percent growth in the weighted values, YoY.
- Centrally located, Teen Haath Naka, where demand outweighed supply of residential apartments on rent, witnessed a mammoth 11 percent hike in the residential leasing values, YoY. The anticipated arrival of metro IV project led the landlord community to command higher rentals.
- Other prominent localities such as Owale, Kalwa and Anand Nagar registered an average rental growth between four and seven percent. While housing demand in Owale and Kalwa was driven by affordability and slew of infrastructure projects, Anand Nagar garnered eyeballs on the back of proximity to plush neighbourhoods and presence of corporate giants.
Affected by dual policy changes – RERA and GST – new launches reeled under pressure in Mumbai in Jul-Sep 2017. Meanwhile, residential sales reported slight improvement as confident buyers were seen returning to the market. Across all budget segments, resale and ready-to-move units remained the prime focus of homebuyers in all zones except Thane.
- Despite several supportive policies by the government, affordable segment failed to suffice city’s housing appetite. Overall, demand and supply mismatch in the current quarter stood at 19 percent. High land costs and challenges besieging salt pan lands were the key deterrents, impacting the total affordable inventory (within Rs 40 lakh) availability in the city.
- Mid-income and high-income segments ranging between Rs 40-60 lakh and Rs 60 lakh-Rs 1 crore respectively, remained the most popular categories. However, ready-to-move units took precedence over under-construction properties as buyers preferred to dodge GST implications involved in the latter.
- Reduced preference for under-construction units also impacted its overall supply in Mumbai and Navi Mumbai. As builders’ community remained engrossed in RERA compliances and completion of existing projects, availability of these units declined by 3-5 percent in Jul-Sep 2017.
- Like the previous quarter, luxury and ultra-luxury segments reported slight alterations, QoQ. With limited new launches in the segments, the marginal increase in supply is probably backed by prospective sellers entering the market.