ANALYZING MUMBAI'S HOUSING MARKETS POST RERA NOVEMBER 2017 Joint publication by Cushman & Wakefield Research & Propstack Introduction The Central Government enacted the REAL ESTATE (REGULATION AND DEVELOPMENT) ACT or RERA as it is popularly called in 2016 and it came into force from 1st May 2017. Methodology of this study The key purpose of enacting RERA and setting up a Regulator is to ensure The study is restricted only to the Mumbai Metropolitan Region transparency and accountability in the real estate sector and protect all (MMR) and covers projects in Mumbai, Navi Mumbai and Thane stake holders as necessary. areas. Only residential projects have been considered for our analysis. Maharashtra is one of the first states to support the implementation of the 0.5% However, we have considered projects under the category of Act. It is the only state to have set up a permanent Regulator as required 3% INDUSTRIAL ‘Others’ in MahaRERA as some of the large projects (purely COMMERCIAL residential or residential with a mix of shops/commercial) were under the Act. (31) (179) also found in this category. 0.8% Additionally, the state was the first to receive an application for mandatory MIXED The localities have been mapped based on pin codes extracted (45) from the MahaRERA database. Data entry errors were observed registration of an ongoing project and has achieved the highest number of in case of 79 projects and have been corrected at our end for 24% such registrations amongst all the states Total data analysis. It must be noted that this correction was confined OTHERS to large projects only. 5,897 (1,441) Cushman & Wakefield Research and Propstack present their analysis of the 71% For the purposes of the report, MMR has been divided into 6 housing projects in the Mumbai Metropolitan Region (MMR) that were RESIDENTIAL markets namely, Western, Eastern, South Mumbai, Navi Mumbai, Thane and Beyond Thane. registered until 31st August 2017. This will help all stakeholders to get a (4,201) pretty good view of the current state of the new housing supply in the In case of 22 projects, the total sold area of the project was greater than the total area of the project. These have been MMR as for the first time, there is quality data available on the currently accordingly excluded from our analysis. under-construction housing projects. In case of 204 projects, the revised date of completion was not updated and have been accordingly excluded from our analysis with respect to ‘delivery and delay’. We are analysing Data entry for ‘Apartment Type’ is not standardized. We found 5,620 that there were 17,148 variations for this. However, 9 variations Projects for our study contributed to 76% of the total count and hence we have only considered these in the configuration/apartment type analysis. (Residential & Other only) While data entry errors were observed in apartment sizes in carpet area (sq. m), it has not impacted our analysis as we have used this data only to arrive sold % in a project. UNITS AREA More than 50% area unsold 506 msf 670,339 Though 52% of the units registered under MahaRERA are shown unsold, 319,352 231 msf the unsold units are larger in size as the total area for unsold units is higher Total Sold Total Sold Units Units Area Area at 55%. Units Area 52% Unsold 55% Unsold 1 NO. OF PROJECTS Joint publication by Cushman & Wakefield Research & Propstack TOTAL AREA 12% Beyond Thane 41% 160.8 NAVI MUMBAI Nearly half the projects (48%) are within the BrihanMumbai Municipal (677) Western 50% 113.5 Corporation (BMC) limits, which however, has nearly 53% of the total area 7% 25% Eastern 46% 105.3 THANE WESTERN and higher average sales of around 48%. (403) (1,393) 46% 47.3 South However, a third of total projects are located beyond Thane of which nearly 5,620 Thane 41% 44.5 60% area is unsold. These projects are mostly large townships and demand for these is somewhat lackluster owing to absence of adequate social and 18% Navi 55% 35 Mumbai 33% EASTERN physical infrastructure and employment opportunities. BEYOND THANE (1,031) TOTAL AREA (msf) SOLD AREA (%) (1,835) Western Suburbs continue to witness the highest activity in terms of 5% launches and sales within the BMC limits. SOUTH (281) Highest sold - Western Suburbs, least sold - Beyond Thane TOP 10 MUMBAI LOCALITIES CONTRIBUTE 45% OF TOP 10 BEYOND THANE LOCALITIES TOTAL AREA CONTRIBUTE 80% OF TOTAL AREA The top 2 locations of Dombivli and Mulund (West) 18 Karjat have almost equal area 45% Dombivali 53% 18.7 Lower Parel 56% 16 under construction in the beyond 6 of the top 10 localities are in Karjat 24% 18 Thane belt. Western Suburbs with 2 in Central Andheri (West) 51% 6.9 13.5 Kalyan 38% 14.9 6.9 Mumbai and 1 each in South Mumbai Chembur 52% 6.913.3 Palghar 29% 13.9 6.9 However, the demand profile for and Eastern Suburbs. Goregaon (West) 59% 6.7 both is diferent as Karjat is mainly 11.2 Mira Road 48% 13.3 considered to be a second home / Except Mulund (West) and Malad Kurla 58% 6.3 10.9 Virar 49% 11.3 6.3 holiday home destination whereas (West), all other locations have Malad (West) 47% 9.3 4.4 Badlapur 38% 10.5 4.4 Dombivli is more attractive for recorded 50% or more sales velocity. Kandivali (West) 50% 8.9 4.5 Bhiwandi 32% 10.3 4.5 afordable to mid segment housing Andheri (East) 50% 8.9 4.4 Ambernath 44% 8.2 4.4 buyers looking for self-contained Bhandup (West) 50% 4.4 8.8 Shahapur 30% 8.1 4.4 large township projects. Total Area (msf) Sold Area (%) Total Area (msf) Sold Area (%) 2 Joint publication by Cushman & Wakefield Research & Propstack 43% projects delayed upto 3 years YEAR WISE COMPLETION DELAYS 6% Nearly 76% of the under-construction projects are scheduled to be > 5 YRS 1,454 8% (324) 0.5% completed by 2020. 3 - 5 YRS BEFORE TIME 1,290 (413) (26) Most of the developers have revised their completion timelines while 42% 6% 961 ON TIME registering under MahaRERA 2 - 3 YRS COMPLETION (331) (2,283) 42% of the projects are expected to be delivered on time with over 86 91.6 86.2 69.7 69.4 75.8 43% of the projects showing delays of up to 3 years and the rest 20% 289 496 491 439 beyond 3 years. 1 - 2 YRS (1,105) 13.1 Beyond 2020, average size of the project to be completed increases 2017 2018 2019 2020 2021 2022 >2023 17% by nearly 4 times from 45,000 sf in 2017 to about 173,000 sf in 2023 O - 1 YR No. of Projects Total Area (msf) (940) 1Nearly and 76% 2 ofBHKs the under-construction are similar projects in areterms scheduled of to supply be and demand completed by 2020. Most of the developers have revised their completion timelines while COMMERCIAL >3 BHK registering under MahaRERA 1 BHK 300,094 8% 48% Though under - construction 1 and 2 BHK units form 81% 3 BHK 1% 36% of the projects are expected to be delivered on time with over 42% 10% 2 BHK 47% 287,450 ofof thethe projects market showing in the delays MMR, of up the to 3 yearssale andof unitsthe rest is beyond almost 3 41% 1 BHK years. uniform at 48% irrespective of the number of bedrooms 3 BHK 49% 73,755 2 BHK 40% Beyond 2020, average size of the project to be completed increases by nearly 4 times from 45,000 sf in 2017 to about 173,000 sf in 2023 >3 BHK 9,040 48% TOTAL UNITS SOLD UNITS (%) 3 Joint publication by Cushman & Wakefield Research & Propstack PROJECT SOLD 75 - 100% (1,072) 20% Just over half (54%) of the 0 - 25% Market is fragmented - lots of small projects 31% Total (1,636) under-construction projects in Projects MMR have seen less than 50% 5,620 PROJECT SIZE (No. of Apartments) 26% Count (%) sales 50 -75% Nearly two-thirds of the ongoing projects 2% 23% 2% (1,389) 42% 25% 19% 10% 25 - 50% within the MMR are small-sized projects 0-50 50-100 100-200 200 500 >1000 (1,256) offering up to 100 units - - 500 1000 However, they represent only 28% of the Area (%) total area under construction with 12% 16% 22% 25% 13% 12% projects offering between 100 to 500 0-50 50-100 100-200 200-500 500 >1000 - units representing 47% of the area. 1000 Price Trends The data on MahaRERA does not provide any information on the pricing of the AVERAGE TICKET SIZE OF ONGOING PROJECTS (INR Million) projects registered. However, we have correlated our own primary data with this and provide the adjacent analysis. Navi Beyond Config. South Western Eastern Mumbai Thane Thane Within BMC limits - South Mumbai mainly caters to the high-end / luxury segments while Eastern and Western Suburbs focus on mid and high-end segments. Average 1 BHK - 6-15 8-13 5-7 6-8 2-5 ticket size varies significantly in areas such as Lower Parel, Tardeo Worli, etc. for a typical 2 BHK / 3 BHK as compared to the prominent localities in the suburbs. For 2 BHK 25-40 12-22 14-20 7-11 8-13 4-8 instance, average price in South Mumbai ranges from INR 25,000 – 80,000 /sf compared to INR 12,000 – 45,000 in the suburbs.