Housing market in 2021: Mumbai tops all-India residential sales in the first quarter
Mumbai, the ‘City of dreams,’ is living up to its name. It continues to fulfil dreams and aspirations of people migrating to the city in search of jobs and entrepreneurial ambitions. The city with its developed infrastructure, easy connectivity and access to public amenities makes it an ideal location for migrants to settle down.
Mumbai is one of the expensive real estate markets in the country, however a whole host of factors at play currently have made buying a house in this city an affordable option for many. Reputed developers that assure quality homes and timely delivery coupled with lowest-ever home loan interest rates in the past two decades, have fuelled this trend of increased sales in the city.
A recent Q1 2021 report of Indian real estate by ANAROCK, India’s leading independent real estate services company clearly indicates that the sales of homes in the top seven cities in India in this period have surpassed Q1 2020 by almost 29% at 58,920 units. This is significantly higher than the pre-covid levels, which indicates an economic resurrection of sorts.
Lending credence to the theory that economic recovery is not a flash in the pan is that the high sale of residences is accompanied by an increase in their launches too which clearly indicates that this is a robust trend. The seven cities in Q1 2021 saw the launch of 62,130 residential units, higher by 18% in the previous quarter and 51% on a year-on-year basis. The group of the top seven cities in India comprises National Capital Region (NCR), Mumbai Metropolitan Region (MMR), Bengaluru, Pune, Hyderabad, Chennai and Kolkata.
This uptick in the sales of homes in the seven cities was primarily led by MMR and Pune, who together accounted for 31, 227 units which is 53% of all the residential units sold in the quarter under consideration. The MMR region comprises nine Municipal Corporations of Greater Mumbai, Thane, Navi Mumbai, Kalyan-Dombivali, Ulhasnagar, Bhiwandi, Vasai-Virar, Mira-Bhayander and Panvel. The MMR region also includes nine Municipal Councils of Palghar, Ambarnath, Badlapur, Karjat, Khopoli, Pen, Uran, Alibaug and Matheran.
MMR alone recorded a sale of 20,350 residential units which was 35% of the total sales of 58,920 units in the set of seven cities under deliberation. This makes MMR the largest market for residential sales in the country. This sale of residential units in MMR was higher by 16% than the Q4-20 period and higher by 46% on a y-on-y basis.
From a launch perspective too, MMR had the largest share with 14,820 launches in FY1 2021. This amounts to 24% of all 62,130 launches in the country during this period. While the growth in the country in terms of launches was 18% on a Q-to-Q basis and 51% on a yearly basis.
The change in Mumbai was higher than the national averages. The launches in Mumbai grew by 24% on a Q-to-Q basis and 41% on a year-to-year basis. MMR had 11,910 new launches in the previous quarter and 10,490 in the quarter last year of new residential units. From an inventory perspective, i.e.available units for sale, the MMR region has the highest number at 1,97,040 of residential units in Indian cities.
The top seven cities in the country have a total inventory base of 6,41,860 homes for sale of which the MMR region has 31%. These indications point out to the trend that the demand for residential properties in MMR continues to be strong and will enhance its position as one of the best cities in the country to live in.
With developers offering multiple payment options, low interest rate regime and discounts which influence the buyer decision, the aspiration to own a home in Mumbai continues to be strong. The strong upward trend in sale and launch numbers in MMR denote that the residential sector in Mumbai is recovering and gently recuperating from the pandemic induced lows.
What lies ahead?
While concerns over the third wave of the COVID-19 pandemic loom large, India has picked up the pace of vaccinations, which could provide comfort and hence the impact on the economy may not be as bad as earlier. The government seems better prepared to deal with situations arising from this pandemic, and avoid any large-scale lockdowns that hurt the economy. Buying a house is the ultimate life goal for many and this pandemic has reaffirmed the importance of owning one. It is therefore expected that the homebuyer confidence in Mumbai’s residential market will continue to be strong.
Experts believe that this confidence will propel home buying and possibly lead to home prices firming up especially with the festive season being around the corner. The extension of fiscal benefits by the Government, the continuation of the soft interest rate regime by the RBI making home loans easily accessible and affordable, discounts and better amenities by the developers will keep buyer traffic in Mumbai strong.
However, this situation is not expected to last long as the high input costs which the developers have been absorbing so far are eventually passed on to the home buyers. There is uncertainty about the continuance of the low-interest rates too as inflation hovers in the background of strong home demand that might lead to a rise in home prices in the MMR region. Experts believe in light of these possibilities the right time to get the dream house is now.
Disclaimer: This is a sponsored article in partnership with Lodha Group