By Accommodation Times News Service
CBRE’s India Residential Market View for H1 2014 reports on the status of the housing market across the country’s leading cities in the first half of the year. Although demand in the residential real estate market of key cities remained subdued during the first six months of 2014, prime residential locations continued to attract strong demand from home buyers owing to quality housing supply across varied price points.
The following are the key points from the report on the Mumbai residential real estate market, which saw a rise in high-end project launches during H1 2014 over the previous review period. Despite the addition of fresh housing supply in the city, however, high property prices and interest rates kept home buyer demand on a short leash:
a) Mumbai’s up market districts attracted marginally more home buyer interest during the first half of 2014. Premium residential locations such as South Mumbai saw steady demand from HNIs and expatriates, with a few large ticket transactions in prime properties of Breach Candy House and Sea Face Park at Breach Candy, and Imperial Towers at Tardeo, among others.
b) Thane and Navi Mumbai accounted for nearly 40% of total units launched in Mumbai during H1 2014. Dronagiri, Karanjade, Panvel and Ulwe in Navi Mumbai and locations along Ghodbunder Road in Thane accounted for a significant proportion of units launched in the high-end/mid-end segments in the first half of the year. Notable launches included Godrej City from Godrej Properties at Navi Mumbai and Runwal Pearl fromRunwal Group at Thane, among others.
c) Capital values appreciated marginally in select micro-markets.Housing prices in select premium micro-markets of the Extended Eastern Suburbs and Navi Mumbai appreciated in the range of 3–5%, while that of the high-end/mid-end segment rose by about 8–10% during H1 2014. Capital values of premium property in the Eastern Suburbs, meanwhile, increased in the range of 7–9%; while that of the high-end/mid-end segment of the Extended Eastern Suburbs rose by approximately 8–10%. Going forward, large inventory pile up is likely to keep capital values stable across most micro-markets in the short to medium term.
d) Rental values remained largely stable across locations during H1 2014. A slight increase in leasing activity led to stability in rental values across all micro-markets during the first six months of 2014. Conversely, subdued demand led to rental decline in the premium locations of Central Mumbai during the review period.
Anshuman Magazine, Chairman and Managing Director of CBRE South Asia Pvt. Ltd. commented: “Mumbai is likely to witness an increase in new project launches in the mid-end segment during the second half of the year. Suburban locations of the city—such as Kandivali, Mulund, Thane and Navi Mumbai—will continue to remain the main growth areas owing to -improving infrastructure and a steady supply of housing units. Home buyer demand is expected to improve by the forthcoming festive season, on the back of improved market sentiments and easing of interest rates.”