Mumbai realty launches decline 36 per cent in 2017: Knight Frank Report
Real estate project launches in Mumbai declined 36% during the first half of 2017 as realty developers focus on compliance with Real Estate (Regulation and Development) Act, 2016 or commonly known as RERA. The Bombay High Court’s stay on permissions to new projects over saturation of dumping grounds in Mumbai also impacted the launches during this period.
RERA compliance deterred builders from marketing their projects, thereby impacting residential sales as well as indicated by 8% year-on-year decline in sales, showed a Knight Frank India report.
“Launches have been hit more than sales. Developers are giving priority to completion of projects and becoming RERA compliant which eventually will augur extremely well for the industry. Sales at 8% lower than the same period last year have come out of the demonetisation impact. On the price front, Mumbai, like other cities, is undergoing a time correction,” said Samantak Das, Chief Economist & National Director – Research, Knight Frank India.
Ratio of the units launched in the price range of below Rs 75 lakhs increased significantly to 84% in first half of 2017 from 56% during the first half of 2016. Smaller apartments and lower price point boosts the share of launches in the central suburbs, while Vasai-Virar and Mira–Bhayandar get the lion’s share.
The existing unsold inventory of 138,652 unsold units in Mumbai Metropolitan Region remains a concern. Analysis indicates that developers will take more than two years to exhaust this stock. Developers push to offload unsold inventory triggers steady sales in the Kalyan-Dombivali belt – highest among other micro markets.
The country’s commercial capital witnessed 19% decline in office transactions for want of quality space and mismatch in price expectations. The first half of 2017 witnessed the highest supply of new completions with 7.6 million sq ft during the period, an increase of 54% from a year ago.
Peripheral markets such as Thane and Navi Mumbai have witnessed new commercial space supply. Vacancy level surges to 22% in the first half of 2017, while Bandra-Kurla Complex and Lower Parel maintain single digit vacancy pushing rentals up by 6%.