As the real estate sector continues to display momentous growth, the MMR region especially has seen a surge of 12 per cent from CY2018 to CY2021 for average value of flats sold. While housing sales showed a remarkable jump from CY18 to CY21, the luxury housing segment dominated sales as it encompassed almost 40 per cent of the sales in CY21.
Owing to the robust policies of the government and an expansive roll out of vaccinations across the country along with consumers understanding the importance of owning a home, the industry has witnessed an improved buyer sentiment.
The MMR region specifically saw a 53 per cent increase from 2018 to 2021 as the growth grew from Rs47,800 crore to Rs73,000 crore
As expected for South Mumbai, 80 per cent of all housing sales were prices over Rs 2 crore and a noteworthy contribution of 55 per cent belonged to projects above Rs 5 crore.
With a stronger GDP and better economic conditions, the buying prowess of the consumer has improved and was highlighted in the sales of Central Mumbai as well with Rs 15,500 crore of the total sales of Rs25,000 crore within the luxury segment (above Rs5 crore). The same trend continued in the central suburbs as well with 80 per cent of the sales marked by apartments above Rs2 crore and almost two-thirds (32.7 per cent) of the sales in eastern suburbs belonged to apartments priced between Rs1 crore and Rs5 crore.
While total number of flats sold in Central Mumbai surged by 73per cent, the western suburbs saw an increment of 21 per cent. However, the western suburbs remained the only market which noted a significant increase of over 10 per cent in the average value of units sold. The diverse MMR market displayed continued growth as total number of flats in eastern suburbs rose by 44 per cent, central suburbs increased by 17percent, whereas the CBD Mumbai rose by a whopping 53percent.
The growth in Thane and Navi Mumbai was staggered during this period with only an increase of 5 & 6 per cent respectively. Nonetheless, each region saw a surge, but the Vasai-Virar belt remained the best performing division as total value of flats sold saw a corresponding increase of 97 percent.
"The Real Estate industry has witnessed a K-shaped recovery in the last few years and the MMR region has strengthened and substantiated the aid from the government to help it back on its track. With robust policies such as reduction in stamp duty and RBI’s low repo rate has helped buyers agnostic of their buying prowess to take ownership of their own house, when the pandemic hit.
While a huge share of new housing is produced to maximize investment return, the increase in sales over the last few years have helped us cover the backlog of unsold inventories and going forward we will see more new projects being registered to further bolster the industry’s contribution to an improved economy," Boman Irani, President of CREDAI-MCHI and President-elect of CREDAI, said.
With an eye on the future of real estate and more buyers looking to invest in the safe haven, Abhishek Kiran Gupta, CEO, CRE Matrix said, "We attribute the rise in housing prices in some projects primarily due to projects own merit well supported by handsome fall in interest rates. Housing Loan interest rates are the lowest ever in India today and our analytics shows that this price change varied considerably at individual project level across all macro-markets. We foresee a healthy 7-8 per cent price rise over next 12 months if this quarterly rise of 2 percent price hike continues into year 2022.”
Principally, given the current changes, the industry is headed towards better returns and real estate investment has increased over the years, and this trend will continue to grow over the coming years as the expected ROI has now become the most attractive component. It will be important to capitalize on the current situation and help the sector back to a U-shaped recovery.
