South-Central Mumbai localities witnessed luxury home sales worth INR 500 Cr last month (October). In 2019, the corresponding period saw luxury sales worth approx. INR 150 crore, thus improving by >230% in the year.
In the post-COVID-19 era, affordability of mid-income homes, calculated on the ratio of home loan payment to income, will touch its lowest-best at 27% in FY21. It was 53% in FY12 and has been falling y-o-y ever since.
Second homes are now a tantalizing vision of shelter in the time of storm – and a rebooted lifestyle which would have been considered neither feasible not possible in pre-COVID-19 times.
Real estate is clearly a superior option for NRI investors. For NRIs, opportunities back home are even more appealing with the fall of the Indian rupee.
Along with the resale homes market, luxury housing took the hardest hit after demonetization. The Government’s continued focus on affordable housing coupled with the surgical strike on high-value currency denominations in November 2016 took the sheen off luxury housing for two years in a row.
The slowdown in Indian residential real estate over the last few years caused most high net-worth individuals (HNIs) to shun luxury housing and look at other investments within or outside real estate.
However, ANAROCK’s latest study indicates that HNIs are now using the tail end of the slowdown in India’s luxury residential market to their advantage.
Stagnant prices and best-buy deals have brought back some of the demand luxury homes, leading to a decline of 12% in this segment’s overall unsold stock in one year.
Just 63,000 ready units currently benefit out of total 6.73 lakh units across top 7 cities
Nearly 22,000 ready unsold units completed before 2017 don’t benefit from new rule
33% of 5.88 lakh unsold under-construction units in the luxury segment – 49% in MMR – will not benefit immediately
Just when the real estate industry was preparing to give the budget a complete thumbs down, the finance minister sprung a surprise ‘bonanza’ for the sector in the last 10 minutes of his speech. Or so it seemed.
Without a doubt, affordable housing gained amidst what was essentially a mass-appeal budget. However, it was the extension of tax relaxation on notional rent for unsold inventory for another year that cheered developers.
However, under closer scrutiny, it is unlikely to benefit a majority of them as on date.
Among the top 7 cities, MMR saw most new launches – nearly 13,600 units & highest sales at 15,200 units in Q2 2018
17,220 promoters and 15,550 agents under MahaRERA – highest RERA registration Pan India
Stamp duty increase may be a slight dampener in the short-term
On the back of critical policy reforms like DeMo, RERA and GST, 2018 is seeing both sales and new supply picking up across cities. Interestingly, the Mumbai Metropolitan Region (MMR) leads this trend.
ANAROCK data indicates that out of the total new housing supply of around 50,100 units in Q2 2018 across the top 7 cities, MMR saw the highest number of new launches with nearly 13,600 new units – a 59% increase against the preceding quarter.
In terms of sales too, MMR clocked the maximum housing sales with approximately 15,200 units being sold in Q2 2018 – an increase of 26% against Q1 2018.
MMR’s top 3 micro markets across budget ranges 2017 – Q2 2018:
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
Anuj Puri, Chairman – ANAROCK Property Consultants