Mumbai Real Estate Report Jan-Mar 2022: Market Updates
Home registrations increase by over double
Property registrations in Mumbai nearly doubled from around 7,700 stamp duty deals in January to about 15,700 registrations in March 2022. The last month of the quarter got some of its pace due to the impending one percent metro cess effective from April 1, 2022. February clocked around 10,000 registrations amounting to over Rs 500 crore stamp duty collection.
Rising raw material prices affect construction work
Amid the continuously growing steel and cement prices, Mumbai realtors are likely to halt construction work at various project sites. Prices of construction materials have surged by 40-45 percent to 400-600 per sq ft in the last couple of years. Also, realtors have urged the State government to extend project delivery deadlines by at least six months until prices rationalise.
CIDCO allocates over 5,700 homes under its housing scheme
The extension of the City and Industrial Development Corporation (CIDCO) housing scheme until March 2022 gave sufficient time to applicants to submit their documents and make payments. Over 20,000 individuals applied under the scheme for over 5,700 homes in Taloja and Navi Mumbai.
Slum redevelopment to bolster housing sales
The Maharashtra government increased the Floor Space Index (FSI) to four times from three for slumrehabilitation projects across State and revised the Unified Development Control Promotion Regulations (UDCPR) to give effect to this increase in FSI. However, the height restriction for structures near the Juhu Airport to 32.7 meters has affected redevelopment works in Juhu, DN Nagar and Andheri area.
COMMERCIAL REAL ESTATE OUTLOOK
Net office space leasing in Mumbai jumped to 1.44 million sq ft in Jan-Mar 2022 against 0.24 million sq ft a year ago. Majority corporates who withheld their deals in the previous quarter due to Omicron fear locked deals, thus improving the absorption rate.
Around 6.9 million sq ft of office space is likely to be added to the city based on the scheduled completions during 2022. The planned supply comprises IT and non-IT developments concentrated in Central Mumbai and the micromarkets of Navi Mumbai, where BKC-2 is proposed.
Boston Consulting Group leased around one lakh sq ft of office space in the Bandra-Kurla Complex (BKC), and Morgan Stanley signed a deal for 3.35 lakh sq ft of office space in Oberoi Commerz III in the Goregaon suburb.
The international retailer, IKEA leased over one lakh sq ft of retail space at R City Mall in Ghatkopar for nine years. Sketchers acquired office space of nearly 80,000 sq ft on an outright basis in Andheri.
Navi Mumbai – The average weighted property prices remained unchanged in Navi Mumbai in Jan-Mar 2022 against the previous quarter. The year began with sale enquiries and sales dipping by 20 percent, courtesy Omicron variant and resultant decrease in site visits, deals, and property registrations. The months of February and March; however, witnessed the residential enquiries going up by around 10 percent.
Compact homes and 1 BHK units remained the preferred choice of homebuyers but restricted supply in the category coerced buyers to consider 2 BHK units in emerging pockets.
Units configured as 2 BHK priced between Rs 65 lakh and Rs 1.5 crore in housing belts, such as Dronagiri, Kharghar, Taloja, Ulwe, Wahal and Panvel, strategically located near the business districts of Belapur remained popular amid homebuyers and builders alike.
Developers paused the construction of many housing societies due to increasing raw material costs and fund paucity in January 2022. Nonetheless, the quarter ending March 2022 clocked the registration of more than 10 projects housing 900 units under MahaRERA. Most of these projects were by regional developers like Paradise Group, Tricity Realty and Satyam Builders, due for possession in 2024-28. Unsold inventory also increased by 2-5 percent to approximately 19,700 units in the studied quarter.
While the popular areas of Koparkhairane, Seawoods and Airoli did not report any new residential launches in the quarter, resale properties in these areas housing belts continued attracting buyers. The growth here can be attributed to Maharashtra government extending the period for stamp duty waiver from one to three years in the resale category.
Rental demand in Navi Mumbai surged by over 50 percent annually. Koparkhairane, Seawoods, Airoli and Nerul remained popular hubs for 1 BHK and 2 BHK units, with residential rentals averaging approximately Rs 20,000 per month and Rs 40,000 per month, respectively. Noticeably, average rentals in Navi Mumbai went up by around three percent in Jan-Mar 2022 against the same quarter previous year.
Thane and beyond – Sale of housing units in Thane pockets grew by 25 percent in Jan-Mar 2022 against Jan-Mar 2021. Homebuyers in the region showed more affinity towards underconstruction units priced within Rs 40 lakh. In this budget category, demand exceeded supply by around 15 percent in the studied quarter.
Buyers were ready to shell more for localities with sound connectivity and additional space. To this end, housing locales of Ghodbunder Road, Pokhran-2, Manpada and Ambernath remained popular for 2 BHK units in Rs 70-1.5 crore budget range. Availability of spacious two-bedroom flats and seamless connectivity via Eastern and Western Suburban Railways contributed to the growth.
Grade A developers like Lodha Group, Puranik Builders and Ashar Group were among the major partakers in adding new supply in the studied period. With around 4,000-5,000 units added in the quarter, the unsold stock as of the quarter ending March 2022 stands at approximately 35,000 units. It might take around 17-18 months to clear the inventory overhang in Thane.
The rental occupancy in Thane grew by around 40-50 percent, YoY. Majiwada, Vasant Vihar, Hiranandani Estate, Hiranandani Meadows, and Brahmand remained most popular among tenants owing to connectivity via Eastern Expressway Highway (EEH) and their proximity to commercial hubs. Average rentals for 2 BHK units in these areas hover around Rs 18,000-35,000 per month.
Mumbai – In Jan-Mar 2022, the housing sales in Mumbai surged by 20-25 percent QoQ with units measuring up to 500 sq ft comprising a majority share. Price competitiveness and the State government’s announcement to waive the property tax on such properties in Mumbai contributed to the growth.
Housing pockets of Mulund, Chembur and the Andheri-Dahisar belt witnessed growth in residential sales. The maximum demand remained lopsided for 1 BHK units in the budget segment of Rs 60 lakh to Rs 1.5 crore. However, residential pockets like Wadala and Chembur remained popular for 2 BHK units.
Goregaon, Wadala and Malad housed the maximum share of new launches. While Transcon Developers made a phase-wise addition to the ongoing project in Malad, Lodha Group and Prestige Group announced new projects in South Mumbai in the budget segment of Rs 4-6 crore. Among others, Chembur East, Pant Nagar and Gulmohar Colony also added to the new supply.
Most developers in Mumbai focused on price negotiation rather than offering freebies to buyers, which meant actual savings for homebuyers. This partly led to an increased offtake and around five percent dip in the unsold inventory to nearly 40,000 units in the quarter ending March 2022.
The rental market of Mumbai was seen gaining momentum slowly in Jan-Mar 2022. Bandra, Andheri-Dahisar belt and Lower Parel, situated near the Central Business District of BKC, remained the preferred rental destinations. However, it might take a couple of quarters for the rental market of Mumbai to reach the pre-COVID ’ask’ rates.