As the commercial capital of India, Mumbai is one of the major real estate markets in the nation. The city offers tremendous employment & commercial opportunities, thereby attracting large numbers of buyers & investors from all over India. Add to this, the glitz & glamor of having Bollywood, the world’s second largest filmmaking industry after Hollywood. Many believe that Mumbai, formerly known as Bombay is not just the name of a city, but an incredible lifestyle, probably unrivaled in India.
However, the immense popularity that Mumbai enjoys has also eventually resulted into unprecedented overheating of the market & have skyrocketed the price to such levels, that it has passed beyond the reach of normal investors & buyers. High price & the recent demonetization drive has resulted into large inventories of unsold of properties. It is estimated that at present the total inventory overhang stands at around 225,000 in the entire Mumbai Metropolitan Region; that includes Mumbai, Thane & Navi Mumbai.
Amidst the slowdown; however, Mumbai is also seeing a host of new real estate frontiers such as Thane & Central Mumbai, attracting both investors & buyers alike. Although, the role of the former is limited in the present scenario & accounts of near around 25% of the total sales. Investors primarily come from Mumbai & nearby regions in Maharashtra.
Real Estate Industry in 2016
Market sentiments have been heterogeneous in 2016. While high prices were inimical to the sentiments towards the prime market, Mumbai continued to expand at its periphery. Out of all the major markets, Thane was the most sought after one, cementing its position as an evergreen market. Even during the demonetization, unlike other parts of Mumbai; overall sentiments remained unperturbed, underpinning, how confident buyers are about the potential market prospect.
In terms of transaction volume, Mumbai did well during the festive season of Navratri & Diwali, wherein the uptake has been higher. However, post ban on high currency notes, like other parts of India, Mumbai market went into a stage of doldrum with sales volume dipping by around 40%. Even in terms of prospect responsiveness & buyer’s interest, there was significant slump., roughly in tune of 30-35%.
Baring Thane, most of the markets suffered from the slowdown. Even in otherwise well-performing markets such as Andheri, Bandra, Virar, Ghatkopar & Powai etc. the slowdown has been evident with many discerning buyers deferring the decision to buy & waiting till things normalize.
Prices in resale went down by around 10-15%; however, prices remain unchanged in the primary launches & thanks to healthy financials, major developers could hold on to their prices
