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.

Mumbai Metro

Phase 1 of the Mumbai Metro which runs from Ghatkopar to Andheri has resulted in a substantial improvement in the realty development along the metro route and areas close to metro stations due to east-west connectivity within the city saving office goers precious time of commuting to-fro work.

As there was no direct link earlier, this metro route has come as a blessing for commuters by taking the load off the existing road and rail infrastructure. This decongestion has attracted buyers who were hitherto hesitant to buy residential or commercial spaces in these areas. Places like Chandivali and Sakinaka in Andheri (east) are easily accessible now. “The demand for both residential & commercial property is heading northward due to the Mumbai Metro,” says Manju Yagnik, vice-chairperson, Nahar Group.

Experts believe that infrastructure development acts as a catalyst that boosts residential and commercial property segments. In this context, the Phase -1 of the Mumbai

Metro has played a crucial role. Considering the pivotal function of rail infrastructure development in the city, Maharashtra chief minister and chairman, MMRDA, Devendra Phadnavis  has sanctioned an outlay of Rs 35,400 crore for the development of 118-kms Metro network in Mumbai alone.

The network includes a 40-kms Dahisar-CharkopBandra-Mankhurd Metro-2 corridor (Rs 12,000 crore), 40-kms Wadala-Ghatkopar-Thane-Kasarvadavali Metro-4 corridor Rs 12,000 crore), 27-kms Dahisar-E-AndheriE-Bandra-E Metro-5 corridor (Rs 8,100 crore) and 11-kms Jogeshwari-Vikhroli Link Road Metro-6 corridor (Rs 3,300 crore).

All these Metro projects will certainly draw property consumers to adjoining areas due to resultant enhanced connectivity. Infrastructural proposals have always contributed to the real estate boom in the city and Nishant Agarwal, managing director, Avighna, believes that the future infrastructure plans like the new metro routes will also continue to fuel growth in the real estate sector.

Property prices in the neighboring areas of the metro rise significantly once the project gets on track. Ramesh Nair, COO business and international director, JLL India, points out that the areas near Ghatkopar-Andheri Metro line have already seen a price rise of nearly 400 percent over the last eight years. A similar trend may continue with the announcement of the new metro corridors in the city.