Despite the withdrawal of all the sops by the state government, residential sales momentum in Maximum City has remained strong in the current fiscal. This indicates that the city’s housing demand is on a winning streak despite the withdrawal of stamp duty benefits.
Of the four quarters, Q4 2021 was by far the best, with housing sales in the top 7 cities attaining a new high of approx. 90,860 units in Q4 2021. This was the highest quarterly sales performance since 2015."
Key South-Central Mumbai localities have shed at least 10% of their total unsold inventory. As many as 10,700 units are currently available for sale in this region; in the same period a year ago, approx. 11,900 units were available for sale.
Residential property prices across the top cities increased by 1-4% in Q3 2021 compared to Q3 2020, mainly due to an increase in construction cost. Data reveals that the top 7 cities collectively saw average property prices increase by 3% annually - to INR 5,760 per sq. ft. in Q3 2021 from INR 5,600 per sq. ft. in Q3 2020. Bengaluru saw the highest 4% annual rise to INR 5,150 per sq. ft.
Redevelopment projects in Mumbai may begin picking up pace again. There are no real alternatives - the biggest problem for real estate development in Mumbai is land scarcity. There are very few opportunities for greenfield developments in the more valuable city centre areas.
MMR housing sales exceeded new launches in the last one year. The region saw total housing sales of approx. 58,170 units in the pandemic period between Q2 2020 to Q2 2021, while new launches stood at approx. 41,500 units.
The previous desire to live in city centres - closer to workspaces, children’s school, etc. - has reduced markedly with the advent of WFH and e-schooling options in the post-pandemic world.
The stamp duty cut significantly stimulated housing demand in the city. The government would do well to seriously consider extending it to keep the property sales momentum - and registrations revenue - going.
2020 kick-started a trend reversal wherein larger homes - spacious enough to accommodate home offices and online study spaces for children - began to be in higher demand
On an average, 1/3rd of the overall project cost a real estate developer incurs in Mumbai goes towards various premiums. In one notable case, for a plot of land valued at INR 5 crore in Bandra, the developer had to pay premiums to the tune of approx. INR 6 crore to the BMC.
