Representative Pic
Representative Pic

Mumbai: Home sales in Mumbai witnessed a decline of 45 percent year over year (YoY) to be recorded at 18,646 units in the first half of 2020 (H1 2020). New residential launches in Mumbai also saw a 47 percent YoY decline to 23,399 units. On account of the fall in sales velocity, the quarters to sell for Mumbai Metropolitan Region (MMR) increased from 9.3 at the end of 2019 to 10.8 in H1 2020 according to the Knight Frank India launched half-yearly report released on Friday. 

The report has stated that the developers have not reduced quoted prices much citing much larger implications on the project. In one-on-one negotiations on the table with the homebuyers, developers have been seen offering discounts up to 18 percent or even more in a few cases. Moreover, to keep the market economics in play during the pandemic-hit industry, developers are offering many indirect offers such as deferred payment plans, assured rentals, EMI waivers, subvention schemes, PLC waivers, and free clubhouse membership. Absorption of GST and stamp duty charges by developers are also on offer in the market.

Amid coronavirus pandemic, home sales in Mumbai declined by 45 percent: Knight Frank India report

Rajani Sinha, Chief Economist and National Director, Research, Knight Frank India said, "The impact of the lockdown has been severe on the residential sector, which was already facing challenges due to slower economic growth, erosion of end user’s financial confidence and challenges of NPAs. The issues are further compounded for both the supply and demand side as lending activities have reduced as financial institutions have become extremely cautious in extending loans. Going forward, for the development side of the residential segment, the government’s proactive actions such as an extension of subsidy schemes, reduction in stamp duty rates, one-time restructuring schemes, and changes to FDI policy will be required for the sector to revive. While for the end-users to return to investing in real estate, the government would have to provide long term financial security through growth-oriented economic policies."

Amid coronavirus pandemic, home sales in Mumbai declined by 45 percent: Knight Frank India report

A similar trend was seen in the office market. The new completion of projects recorded a hike of 90 percent YoY to 3.64 mnsq ft, while the leasing activity in Mumbai declined by 17 percent YoY to 3.85 mnsq ft in H1 2020. This declined was owing to the nationwide lockdown period imposed to combat COVID-19. 

The report highlights that the leasing activity is likely to stay under pressure in the coming months given the economic impact of lockdown on India and global recession forecasted for 2020. While many occupiers would look to postpone their leasing decisions till things stabilize, some may be forced to give up existing spaces due to business slowdown. 

In Mumbai, the average deal size increased to 44.4 percent YoY to Rs 41,987 sq ft, despite the reduction in the number of deals from 160 in H1 2019 to 92 in H1 2020. The sector of BFSI had the highest share of transactions in H1 2020 at 41 percent, followed by Information Technology (IT) at 35 percent. The share of the IT sector spiked up in H1 2020 due to a large deal by a leading IT company. However, the share of the co-working sector in new leasing declined from 7 percent in H1 2019 to 3 percent in H1 2020.

Knight Frank H1 2020 Mumbai pdf.pdf

The business districts of MMR which were witnessing stronger rent growth in recent years witnessed tapering of rent growth due to the lockdown. 

Sinha commented, "The nationwide lockdown has brought the hitherto healthy momentum in the office market of MMR to a halt. Businesses have become conscious of the impact of the lockdown and have therefore put their expansion plans on hold leading to lower leasing activity especially in Q2 2020. Companies are further looking to save on operating expenses by seeking to renegotiate existing leases. Overall the leasing activity is likely to stay under pressure in the coming months given the economic impact of lockdown on India and global recession forecasted for 2020."

"Co-working spaces, that had been observing phenomenal rise till the end of 2019, were quick to go into a wait and watch mode, as the vacancy in co-working spaces increased as a direct result of the lockdown. Operators are expected to remain cautious about new space take-up in the coming six months further impacting the office space take-up," he added.

Unsold inventory and number of years it will take to liquidate (QTS in quarters). 


Unsold units--1,50,054


2.7 years 

South Mumbai

Unsold units --2,321


7.14 years

Central Mumbai 

Unsold units--6418


9.20 years

Central Suburbs

Unsold units--29355

QTS-- 22.8

5.70 years

Western Suburbs

Unsold units--26245

QTS--16.20 year's

4.05 years

Navi Mumbai 

Unsold units--26462


3.98 years


Unsold units--24672


4.11 years

Peripheral western suburbs

Unsold units--19,928


1.58 years

Peripheral central suburbs

Unsold units--14,652


0.83 years

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