Infrastructure projects receive a boost
Multiple infrastructure projects at different stages of development are expected to set the pace for the city’s realty growth. Some of these include the proposed metro corridor in Thane, the signal free corridor on the Western Express Highway, recently commissioned Nerul-Uran rail link in Navi Mumbai and a town planning scheme announced under Navi Mumbai Airport Influence Notified Area (NAINA).
Affordable housing receives a shot in the arm
To cater to the demand for low-cost units, the government launched several projects under PMAY including an affordable housing project worth Rs 18,000 crore and offering 90,000 budgeted units in MMR. Besides, sanctions have also been made for the allotment of grazing lands and plots for the construction of affordable homes in the city.
Government hikes stamp duty rate
A one percent increase in the stamp duty from five to six percent is likely to accelerate property values in the city and dampen homebuying sentiment. Increased revenue from the hike will be used to fund infrastructure projects such as freeways, sea links and Bus Rapid Transit Systems (BRTS).
Building heights in Marine Drive capped at 24 m
Citing the area’s heritage significance, the apex court restricted the height of buildings near Marine Drive to 24 m. It declined the suggestions of the Brihanmumbai Municipal Corporation’s (BMC) for increasing the height of buildings in the area to 58 m on the same grounds.
Mumbai DCPR 2034 to improve city’s skyline
The approval of the Mumbai Development Control and Promotion Regulations 2034 (DCPR) bodes well for the city’s realty landscape. The move would open 3,700 hectares of land, earlier designated as No-Development Zone (NDZ), for construction of new residential projects. The increased supply is expected to trigger a price correction to the tune of 10-15 percent.
The Oct-Dec 2018 quarter was a mixed bag for Mumbai’s housing market. While festive offers steered residential demand, the increase in stamp duty rates by a percent marred buyer sentiment.
Housing pockets in Thane with maximum concentration of affordable units continued to be the cynosure for potential homebuyers, followed by Navi Mumbai and Mumbai, which remained the preferred residential hotspots for properties priced between Rs 70 lakh and Rs one crore. The premium residential landscape continued to reel under pressure due to limited inventory offtake. While the total supply of apartments in the city rose by 10 precent, average weighted capital values witnessed a marginal hike of a percent.
Unlike other metros, Mumbai witnessed healthy sales in the under-construction segment, which captured around 60 percent share of the total residential demand. End-users continued to drive the city’s housing market in Oct-Dec 2018, whereas investors remained at bay. Noticeably, unsold housing inventory in Mumbai trimmed down from over 2.5 lakh units in December 2017 to around 1.3 lakh units in 2018.
Holistically, the city’s real estate sector has significantly benefitted from the increased accountability and transparency instilled by MahaRERA. However, the rippling effect of liquidity crisis led by NBFC and locking up of 70 percent of project funds in escrow account have created financial challenges for developers in completing their ongoing projects. This might cumulatively impact the projects scheduled for delivery in 2019.
Navi Mumbai emerged as an attractive homebuying destination in Oct-Dec 2018 and recorded a 30 percent uptick in the housing demand vis-à-vis Oct-Dec 2017. Close to 10,000 new housing units were added to the city during the period. Overall, the quarter was marked by multiple new launches and re-launches by several reputed realtors.
The Oct-Dec 2018 quarter can be described as the period of strong revival for Navi Mumbai’s housing market. More than 70 percent of the tracked housing locales reported an uptrend in the average weighted property prices, QoQ. Overall, average capital prices recorded one percent hike in Q4 2018 when compared to the previous quarter.
Close to 60 percent of the market demand hailed for under-construction segment followed by the resale market. Mid-sized 2 BHK units priced between Rs 75 lakh and Rs 90 lakh remained the most favoured configuration.
Increased supply from established players both in the new launch and re-launch categories outlined the quarter. Budding areas such as Ulwe and Taloja stayed fairly popular amidst developers and posted maximum inventory supply, particularly in the affordable segment.
Localities in the North zone such as Silphata and Ghansoli remained the market-bearers, and recorded a four percent growth in the average weighted capital values, each, QoQ. While Silphata witnessed traction on the back of affordability, Ghansoli topped the popularity charts owing to ample availability of ready-to-move units.
Luxury and ultra-luxury properties varying from Rs 1-2 crore and Rs 2 crore and above, respectively, failed to report any quarterly change in the housing demand. On the contrary, supply reported a marginal uptick of a percent, QoQ. The improvement in inventory supply could be attributed to homeowners’ willingness to dispose of their properties in the wake of improved market sentiment.
Rentals in Navi Mumbai remained robust and clocked a four percent hike in the average 'asks', YoY. Ulwe aced the market with a seven percent increase in rental values. Improved rail connectivity and competitively priced rental stock benefitted the housing pocket.
Following suit, prominent micro-markets of Kharghar, and Seawoods also rose to popularity and observed a six percent hike in the average weighted rental prices, each, YoY. Increased demand for student housing and improved connectivity to commercial centers like Vashi drove rentals here.
THANE AND BEYOND
Competitively priced inventory and infrastructure push co-scripted Thane’s growth story in Oct-Dec 2018. With enormous demand in the pipeline, enquiries surged by 20 percent vis-à-vis Jul-Sep 2018. New launches also reported 30 percent growth with respect to the previous quarter. Close to 1,000 new housing units were added to the market, with maximum supply in the affordable housing segment.
Boost to several big-ticket infrastructure projects such as Thane coastal road, Mulund-Ghodbunder foothill roads, and the proposed Thane-Kalyan metro fanned realty sentiment in Thane. While housing demand remained buoyant, Thane reported a negligible one percent growth in the average capital prices, QoQ, due to maximum investors belonging to low-ticket size.
Despite an increasing number of reputed developers foraying in the affordable segment, demand continued to outstrip supply. Close to 60 percent of the housing demand in Thane was for properties priced within Rs 50 lakh.
Overall, the quarter was characterised by an improvement in enquiries and site visits, but limited sales volume. Irrespective of several marketing strategies and offers announced by the developers; sales failed to register a substantial growth. Anticipating a price-correction, consumers deferred their homebuying decisions.
Defying all odds, Ghodbunder Road remained the most popular housing destination among real estate stakeholders. It not only witnessed maximum inventory supply in the quarter but also healthy traction from homebuyers. The ongoing metro development, relative affordability, a host of residential offerings by reputed players and the presence of corporate giants cumulatively helped boosting realty growth along the stretch.
Benefitting from the factors mentioned above, Kolshet along the Ghodbunder Road emerged as the bellwether and clocked five percent growth in the average weighted capital prices, QoQ. Patlipada, Kasarvadavali, and Anand Nagar were a few other popular micro-markets along the belt that garnered robust demand and registered 2-4 percent hike in property ‘asks’ in the last two quarters.
Rental housing in Thane flourished on the back of burgeoning commercial expansion and increased demand from working populace. Average rental values in Thane grew by two percent, YoY.
Like the capital market, demand for rental housing concentrated along the Ghodbunder Road. Areas such as Owale, Kasarvadavali, and Dhokali emerged as the prime rental markets with each recording 5-6 percent hike in rentals, YoY. Dombivli also witnessed a four percent growth in rental ‘asks’. Affordability coupled with the the State government’s plan to extend metro nexus up to Dombivli pushed rental prices in the micro-market.
The festive period of Dussehra and Diwali coupled with improved market scenario set the tone for Mumbai’s residential real estate segment in Oct-Dec 2018. Resale properties remained the flavour of the season, closely followed by competitively priced units. Overall, demand in the secondary market surged by 20 percent during the period vis-à-vis Jul-Sep 2018.
Mumbai’s residential landscape displayed stability with a marginal increase in the average capital values in Oct-Dec 2018. More than 50 percent of the listed localities across the city recorded an uptrend in their average weighted capital prices, QoQ, albeit minimal.
The quarter was characterised by augmenting property enquiries and transactions in October and November, whereas December remained dampened on the back of an increase in stamp duty rate from the earlier five percent to six percent.
Resale properties priced between Rs one crore and Rs 1.5 crore dominated the popularity charts. Besides, new project launches at relatively lower ‘asks’ garnered traction and revived the otherwise neglected under-construction segment. Reduced carpet area and diminished ticket sizes befitting buyers’ expectations abetted popularity in the latter category.
The northern locales offering mid-income projects and smooth connectivity remained the hotbeds for the homebuyer fraternity. Jogeshwari (West) emerged as the top grosser with a five percent quarterly growth in the average weighted capital values. Following suit, Bhandup (East) and Dahisar, also witnessed increased demand and clocked a four percent appreciation in property rates, QoQ.
Renting homes remained a notable trend in the quarter. Overall, demand for rented accommodations grew by 12 percent in Oct-Dec 2018 vis-à-vis Oct-Dec 2017. Increased demand for student housing coupled with commercial expansion ensured rental growth.
Tilak Nagar led the popularity index and chronicled a seven percent growth in the average rental prices, YoY, courtesy consistent demand from student community due to the presence of several reputed colleges in the vicinity. The area is also located close to the Mumbai International Airport, which further adds to its popularity. Among others, Mulund and Versova emerged as the most preferred micro-markets, witnessing a six percent increment in their annual average rental values, each, YoY.
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