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
Contact Us :
501, 5th Floor, Plot No - A-123/4,Odyssey IT Park, Road No. 9,Wagle Estate
Thane (W) - 400 604, Maharashtra, India
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