High housing supply in Mumbai

The considerable gap between demand and supply in the Mumbai Metropolitan Region (MMR)'s residential markets is impacting the real estate market of Mumbai. This was evident in the MagicBricks.com data of the October-December quarter 2014, where high supply of housing units in Mumbai, Navi Mumbai and Thane, were seen in varied ranges. While in Mumbai the properties worth Rs 1 crore and above are showing an oversupply of 15 per cent, Navi Mumbai is seeing an oversupply of 10 per cent in properties over Rs 50 lakhs and Thane is seeing high supply of properties priced Rs 1 crore and above.

This was also indicated through a Knight Frank report which mentioned the pile-up of stock of unsold properties in Mumbai. The situation is such that it will take at least three years to dispose off these units, the report said but has the slow real estate market and lot of supply put you in a dilemma, where you have questions such as when to buy? Will property prices in Mumbai come down? Where to buy? Let's dig into details.

“As Mumbai is an end-user driven market, even a small gap between the demand and supply of properties impacts market sentiments and property prices. Majority of projects in the city are either delayed, incomplete or stuck at various stages of construction. The bulk of such vacant properties can be seen in the suburbs,“ said Gaurav Tandon of Tandon associates, a local real estate agent who deals in Mumbai and Thane. Looking at the situation, specifically in Mumbai, the ready possession properties continue to command significant premium compared to the under-construction ones.This is further fuelling the price premium of ready possession proper ties. Supply is primarily in a few pockets where demand is weaning or has very little scope going forward. Supply in the Bandra-Andheri zone is limited thus, property prices will not come down but when you see that supply in the Panvel zone is higher, there is room for price correction in times to come.

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MCHI-THANE has always been very clear that fine housing complexes and shopping malls cannot stand in isolation. A great City is the sum total of great buildings, great infrastructure and great people. MCHI has been committed to growth of the real estate sector and is credited with the harmonious growth and rise in quality and standards of construction in Thane City in the past decade.

Its aim as an Association of Developers has been to seek rational rules and regulations which are uniformly applied across the board as this will to a great extent result in speedy construction, cost reduction, fair pricing and a push for better quality standards at par with the developed world, with a high level of transparency.