99acres Insite is a quarterly report which captures the capital and rental price trends of the residential realty market across seven major cities of India. According to the report, property prices per sq ft in Mumbai plateaued in Jul-Sep 2016, as compared to Apr-Jun 2016. However, the rental market buoyed by 2% in the last one year.
Commenting on the report, Narasimha Jayakumar, Chief Business Officer, 99acres, said, “The ongoing Navi Mumbai airport project and expansion of the metro network are acting as growth catalysts for MMR’s realty landscape. Several pockets in Mumbai saw a revival in the capital graph, however, the overall market continued to combat the challenges of high prices, inflation and project delays that afflicted the sector over the previous quarters, as well.”
Price Trend Analysis of Mumbai (Jul-Sep 2016 vs. Apr-Jun 2016): Mumbai Metropolitan Region (MMR)
Despite relatively positive stakeholder sentiments during Jul-Sep 2016, sales volume recorded modest changes and average weighted prices continued remaining under pressure in MMR. The growing unsold stockpile and numerous project delays distressed the market. Beating the overall blues, Jogeshwari (east), located near Andheri on the western railway line, witnessed a 7% increase on account of competitive pricing and enhanced connectivity via Jogeshwari North flyover that goes towards Goregaon and Malad. The locality also scored over its expensive counterparts such as Andheri and Vikhroli. Navi Mumbai A marked improvement in sales volume and new project launches in Navi Mumbai in H1 2016 failed to translate into a corresponding rise in average weighted prices. Navi Mumbai, thus, recorded no change in overall capital values QoQ. Belapur, Navi Mumbai’s central business district (CBD), has caught the attention of several developers who want to monetise the industrial belt. This propelled a 4% rise in capital values in Belapur QoQ.
Rental Analysis of Delhi (Jul-Sep 2016 vs. Jul-Sep 2015): Mumbai Metropolitan Region (MMR)
While the commercial market in MMR witnessed a boom, and the demand for housing units moved up; the rental rates did not show any huge surge in ‘ask’ rates YoY. Rental rates in Bandra (east) witnessed a growth of 13% YoY. The rental demand here is driven by the emergence of Bandra Kurla Complex (BKC) as one of the prime central business districts (CBD) in the area. Thakur Village, a developed locality in Kandivali, too witnessed a double-digit growth in average rents on account of several residential societies commanding a higher price with each quarter. Proximity to schools, strong internal and external connectivity and sound public transport system have been the other growth drivers. Localities such as Mira Bhayander and Dahisar benefitted on account of the gradual rise in demand for properties situated close to corporate hubs and important connectivity junctions.
Navi Mumbai’s rental landscape felt the ripple effect of the commercial expansion and upcoming Kopra-Panvel airport, resulting in a 6% rise in average lease rates in Jul-Sep 2016 compared to the same period a year ago. Affordability, proximity to corporates and a variety of housing options continued to attract the tenant community to localities such as Kalamboli and Taloja, where rentals appreciated by 11% and 14%, respectively, in a year. Ulwe and Vashi recorded an eight per cent rental yield each, YoY, as fresh demand percolated in these micro-markets post the announcement of Navi Mumbai smart city project and ongoing tendering for the upcoming airport. Civic issues such as garbage dumping and lack of planning triggered a four percent drop in median rental values in New Panvel, YoY.
Thane and Beyond
The rental market mirrored similar sentiments as the previous quarter, with a 2% uptrend in median rental prices YoY. Competitively priced and well-connected micro-markets steered the rental graph on a growth track. Ghodbunder Road and Majiwada emerged as the most favoured housing belts for rental accommodations, with 11% and 10% increment in average weighted prices over the last one year. The availability of affordable luxury projects and proliferation of IT companies along the Thane-Belapur industrial belt raised demand from the tenant community, particularly in locales such as Kalyan (west), Waghbil and Dombivli (east). Ambernath and Teen Haath Naka grappled with issues such as water scarcity, lack of basic road infrastructure and high levels of pollution, closing the quarter with a fall of six and four percent, respectively.
Supply Analysis (Jul-Sep 2016 vs. Apr-Jun 2016)
The popularity of residential apartments continues unabated, standing at 95%, inching up slightly QoQ. The concerns of the homebuyer community were reflected in the shortfall in supply of affordable homes within Rs 40 lakh. While demand for this budget category rose by 3% to 40% in Jul-Sep 2016, supply remained unchanged at 23%. Reduced margins dissuaded developers from launching projects with 1BHK apartments. There was a whopping 17% shortfall in supply of this unit size. Thane supplied the maximum 1BHK units, at 43% in Jul-Sep 2016.