Real Estate News
June 27, 2016
How did the first half of 2016 pan out for the realty sector? Were there key launches in the affordable segment? What was the absorption rate like? How will the lessons learnt pave the way for the rest of 2016? Read on...
Mumbai's realty mar ket had witnessed a sluggish growth in 2015 due to global and national eco nomic factors and higher interest rates. The first half (H1) of 2016 (calendar year), seems to be working in the favour of Mumbai's realty market. The economic indicators have shown a good sign of strength. The interest rate is hovering below the double digit figure. The Indian Meteorological Department has predicted a surplus monsoon this year. As opposed to last year, Mumbai's realty sector has performed better in H1 2016.
PERFORMANCE IN H1 2016:
While analysing the performance fig ures of Mumbai's residential realty market, Ramesh Nair, COO operations and international director, JLL India presents the following points: “The average residential property prices in Mumbai saw an annualised ap preciation of 3.3 per cent in 2015, which was recorded at about 7 per cent in 2014. This year, we predict an increase in residential property prices by around 6 per cent; South-central Mumbai (Byculla, Parel, Worli, Prabhadevi and Dadar) and the eastern suburbs witnessed the maximum appreciation at 4.3 and 4 per cent respec tively, followed by north Mumbai and the western suburbs at 3.9 and 3.5 per cent respectively; Thane's property prices rose by 3 per cent, and Navi Mumbai's by about 6 per cent. Localities in Navi Mumbai and Thane experienced maximum traction due to affordable property prices; Absorption in the luxury segment is still under pressure due to unaffordable property rates and limited buyers in the market. Over 67 per cent of the total unsold inventory is priced over Rs 1 crore.“
Pointing at the evolving realty desti nations of Mumbai, experts reveal that with the construction of the Navi Mumbai International Airport on the cards, the outlook for Navi Mumbai and the sur rounding areas looks positive. The residen tial real estate outlook for areas such as Ulwe, Palghar, Koparkhairane, looks promising as many developers are flocking with affordable housing projects in these areas. “There has been a slight increase in the new launches in Q1 2016 as compared to Q1 of 2015. This was largely driven by a few large project launches in the eastern suburban submarkets that constituted the majority of the unit launches (36 per cent), followed by Navi Mumbai and Thane. This is true across all major micro-markets and especially Thane. As per the data from Cushman & Wakefield for the first quarter of 2016, the new residential launches in the MMR were 5,356 units and those for the same quarter last year were 4,000 units. This shows that de velopers are looking for some early signs of recovery in the mid-market residential space,“ explains Amit Goenka MD and CEO, Nisus Finance.
Property rates quoted by developers have either remained stagnant with respect to the middle-class segmentaffordable segment homes or have seen a decline in terms of luxury housing.
PERFORMANCE EXPECTATIONS FROM H2:
“Since monsoon is always a dry season for the realty market across India, not much traction is expected. But immediately after the monsoons, the festive season starts and lasts for a good three months of the second half of the year, and it can provide the best results, especially, if a further 0.25 per cent reduction takes place in the interest rate and better job opportunities come up (as they push purchasing power). An other rationale is that the buyer cannot delay his buying de cision for a long time.Also, only 100 per cent approved projects are being launched in the market, so essentially, buyers don't have to worry about approvals and mortgages are available in the 20:80 scheme,“ suggests Ravi Gurav, member MCHI-CREDAI and vice-president, marketing, Dheeraj Realty.
According to experts, in H2-2016, in the middle-income and affordable range, there should be a larg er off-take in absorption with prices remaining firm to marginally increasing.
The market has already witnessed a revival in demand in the mid and affordable segments. The economic growth and buoyant capital markets have led to the increasing appetite in key micro-markets. This is reflecting in increased enquiries and higher launches. The application of RERA will further boost demand with higher investor confidence and an improved market sentiment.
Thus, the built environment of real estate within Mumbai does hope that the second half of 2016, would finally bring in the much needed cheer for this sector.
To Buy Property In and Around Thane or Know More about Builders and Developers Contact Us at 022 2580 6868
Source: DNA Newspaper
At MCHI CREDAI Thane, we have gone one step ahead and would allow you Enjoy 360 days of MCHI Exhibition!