Real Estate market of Mumbai

Now some of the buyers are finally returning to the real estate market of Mumbai, as real estate developers are offering 5 to 10 per cent discount and other offers as well such as; foreign trips, free parking space, free car, free AC and more. Now in Mumbai’s real estate market due to reduced size of apartments and falling interest rates now it’s easy to sale the residential property and now currently home sales in Mumbai is 28 percent more in comparison of last four quarters, as per the reports of JLL India.

According to the Ramesh Nair, COO of JLL India, This is the balance of factors as; interest rates are dropping and real estate developers are offering huge discount, freebies with attractive schemes, sizes of apartments are dropping to make the apartments more affordable, buyers are thinking that market is all time low and it have bottomed out and all these factors lead towards the overall marginal improvement in the confidence of customers”. However; as per the trend it’s clear that in few launches people prefer to buy residential units whereas; in broad market there is no progress. Local property markets are not convinced with the latest numbers and statement that real estate market continues to be sluggish and these numbers may or may not be reflect an improvement in end-user sentiments.

According to Yashwant Dalal, President, Estate Agents Association of India, “In present, resale segment is seeing thin volume and even in primary market new launches, financial institutions are underwriting inventories. The more he added that we have the last year numbers and this year its much more than the last year”. As per the JLL India report, “Real estate developers in Mumbai have managed to sell more than 16,990 units in new projects in primary market in the duration of last four quarters, which ended on the September 30. And in previous four quarters the sales of residential units were 13,290 apartments. In slow market it is the sign of improvement and it has released the pressure on real estate developers. Due to weak price and more supply than demand in the market, real estate builders are shying away from the launching of new projects. However; the new launches in the first six month of 2015, was declined by 26 per cent from a year ago. As per the local brokers, real estate builders would prefer to hold the supply as well as construction than reduce prices and incur losses.
According to real estate market expert JLL India is not expecting rise in the price of houses for next two to three years as still builders are focusing on the inventory cleaning. In past few months we have seen some price correction which happen in last quarter, but capital values have not gone up. According to local brokers, real estate developers would prefer to hold the supply and the construction in different projects to bring down the price and incur losses. However; real estate developers are maintaining affordability of apartments just by reducing the size of residential units with the average reduced size of roughly 6 per cent annually.

Performance in Stock Market:

There are many real estate developers which are listed in stock market such as; DB Realty, Oberoi Realty, Hubtown, Mahindra Lifespace Developers and Godrej Properties and they are operating in Mumbai. The hottest property markets in the country have declined by the rate of 214 per cent in the past one month. According to real estate analysts, the second half of the financial year will be better for the organized players as they are ready with new launches to erase the debut. As per the statement of Samar Sarda, Lead Analyst in Real estate Segment at the Kotak Institutional Equities, “The overall real estate market will continues to shrink and most organized developers will get the more growth and gain in terms of market share.

DB realty, Radius to tie up for development

MIG (Bandra) Realtors & Builders, a subsidiary of DB Realty is looking to enter into a joint venture agreement with Vishwaroop Estates and Developers owned by sanjay chhabria radius developers’s Radius Group for a housing project in Bandra, Mumbai with estimated sales revenue of Rs 3,500 crore.

In this co-branded project, both the parties would make investments to meet certain agreed cost lines and share the free sale area in the agreed ratio, DB Realty said in a BSE filing.

“All approvals required at this stage have been received and the piling work has already begun. A formal launch of the project is scheduled in mid-November around Diwali,” the company said in the release.

The project will be developed on a land parcel spread across 5 acres, located in the Bandra Kurla Complex (BKC) area. The total built-up area of the project is likely to be over 2.4 million sq ft. Height approval for construction of a 29-storey tower has been sanctioned by the Airport Authority of India.

Bandra Project

Development of land admeasuring about  20,150 sq mt in the Bandra Kurla Complex (BKC) is being undertaken by MIG(Bandra) Realtors & Builders which is a wholly-owned subsidiary of DB Realty. DB Realty had entered into an agreement with MIG Cooperative Housing Society for the said development in October 2010. So far DB Realty has made an investment of Rs. 340 crore in the project.

The building which is expected to be the tallest residential property in the BKC after completion, has obtained the necessary height approval from the Airport Authority of India for construction of a 29 storied tower.

The company proposes to commence the construction of the tower in October 2015 and expects to complete it within 39 months. Owing to this, revenues of DB Realty are anticipated to boost over the next four years.
After BKC has come up as the main central business district, this area is highly in demand as a residential location in Mumbai. The property prices are surging and  range between Rs 35,000 and Rs 55,000 per sq ft. The news of this development had also given a boost to the share prices of the company on the BSE in July this year.