INSITE MUMBAI RESIDENTIAL MARKET UPDATE JANUARY - MARCH 2021 Market Sentiment WHAT’S INSIDE? • InFocus: Union Budget 2021-22 • National Outlook Snapshot of real estate ambience across top 8 metro cities • Market Movers News that impacted Mumbai’s realty market in Jan-Mar 2021 • Commercial real estate outlook • Residential demand and supply dynamics • 99acres’ Outlook Our perspective on the current market sentiment • Key trends in the buying and renting landscape • Price trends across key micro-markets FROM CBO’S DESK The first quarter of 2021 witnessed a resurgence in sales volume across On the supply front, over 600 residential projects were launched in metro cities, particularly in Pune and Mumbai, amid a stamp duty cut metro cities, adding approximately 75,000 new units to the market. until March. While continued adoption of work-from-home weighed down Mumbai contributed close to 40 percent of the total new supply, rental demand and ‘asks’, it pushed the desire to own a home further up. followed by Hyderabad at 20 percent and Pune at 15 percent. Owner This subsequently brought back interested homebuyers to the market, listings posted on 99acres also went up by 20 percent in Jan-Mar 2021 who leveraged on deals and discounts rolled out by developers and against Oct-Dec 2020. home loan interest rates slashed by lending institutions. In line with the recovering market sentiment, site visits and sales, pricing power returned The green shoots of recovery seen so far will have to stand the test of to the sellers. Based on properties listed on 99acres, none of the eight time with a steep surge in COVID-19 cases and the resultant restrictions metro cities recorded a downward revision in average listing prices of in some cities may impact economic recovery, project construction Maneesh Upadhyaya residential apartments in Jan-Mar 2021 against the previous quarter. timelines and buyer site visits. Fingers crossed as we enter the new Chief Business Officer Buyer responses also reported a seven percent surge in the same period financial year. 99acres.com on 99acres. INFOCUS: UNION BUDGET 2021-22 NATIONAL OUTLOOK FOR THE HOMEBUYERS FOR THE INDUSTRY HOME BUYING SENTIMENT PROPERTY PRICES Giving a fillip to affordable The Government showed its inclination The home buying sentiment remained Property prices remained unchanged homebuyers, Union Finance Minister towards boosting affordable housing upbeat in Q1 2021, despite a fresh wave in Delhi NCR, Mumbai, Bangalore and Nirmala Sitharaman extended the time supply by proposing an extension in time of COVID-19 cases across metro cities. Pune, but inched up slightly in cities limit to avail additional tax benefits of line for developers to avail a tax holiday While site visits reduced in March 2021, like Hyderabad, Chennai, Kolkata and Rs 1.5 lakh under Section 80 (EEA) of for another year till March 31, 2022. The housing sales grew gradually. Mumbai Ahmedabad. Unsold inventory of about the Income Tax Act. The Government Union Finance Minister also granted and Pune led all metro cities in terms of 4.6 lakh units maintained a downward also announced steps towards additional tax exemptions for affordable property sales as homebuyers rushed pressure on property prices, despite a improving the civic and transport rental housing projects, which are aimed to cash in on the reduced stamp duty surge in construction costs, thus forcing infrastructure in the country. For at providing rental housing for migrant rates, a benefit valid until March 31. developers to limit profit margins. instance, under the Jal Jeevan Mission, workers. Moreover, the Government an outlay of nearly Rs 3 lakh crore was proposed to make suitable amendments RENTAL LANDSCAPE SUPPLY announced to improve water supply in the legislations regarding debt financing In line with the previous quarters, While new housing projects surged across 4,400 urban local bodies, and of Infrastructure Investment Trusts (InvITs) the rental market remained grim as across cities, QoQ, numbers remained Rs 18,000 crore were allotted for and Real Estate Investment Trusts (REITs) professionals and students continued significantly lower than a year augmenting public transport, such as by Foreign Portfolio Investors (FPIs), to operating from home. A surge in COVID ago. About 600 new projects were bus and metro networks in Tier I and ease access to finance for InvITs and REITs, cases further delayed the reopening of launched this quarter. Supply in the Tier II cities. While the Government therefore augmenting funds for the realty organisations and institutions, marring secondary market also improved as did not provide any direct benefits to sector. Apart from these inclusions, there hopes of a revival in the rental market. property owners attempted sales while homebuyers, it tabled several fiscal was no mention of key industry demands Rentals are reportedly down by 10-15 maintaining their ‘asks’ and avoiding benefits to boost the economy and such as reduction of GST slab rate or percent since last one year. massive negotiations. address unemployment at large. reintroduction of Input Tax Credit (ITC). KOLKATA DELHI NCR 3% CHENNAI 3% 4% SHARE OF NEW LAUNCHES BANGALORE 8% The quarter witnessed the launch of about 600 new residential projects in top eight metro cities. Mumbai led all cities for the third quarter in a row with a 38 percent share in new and re-launched projects. Hyderabad surpassed Pune and took the second position with a 21 percent share. Interestingly, Delhi NCR again contributed the least with a AHMEDABAD three percent share in the overall new unit additions; however, it reported a 70 percent jump in new launches, QoQ. 9% MUMBAI Bangalore, too, reported a nearly 10 percent growth in the number of new project launches in Jan-Mar 2021 vis-à-vis 38% Oct-Dec 2020. PUNE Note: The data depicts share of new launches across metro cities in the studied quarter 14% The numbers include re-launched projects HYDERABAD 21% MARKET MOVERS COMMERCIAL REAL ESTATE OUTLOOK Property registrations Construction premiums spike by 70 pc in Mumbai slashed by 50 percent • The COVID-19 vaccine roll-out • Demand for co-working spaces The two percent reduction in stamp The Maharashtra government reinstated investors’ confidence in declined by nearly 20 percent, QoQ. duty and all-time low home loan reduced the construction premiums the market. Resultantly, the office Conventional workspace models interest rates helped push property by 50 percent until December 2021. space leasing in Mumbai increased and managed offices regained the registrations up in Mumbai by However, only those developers who by nearly 15 percent, QoQ in lost ground amid the reduced fear 70 percent in February 2021, YoY. bear the burden of homebuyers’ Jan-Mar 2021. All Cargo Logistics of the contagion. Total sale deeds registered in January stamp duty would be allowed to leased 6,000 sq ft of Grade A office • hBits, a fractional ownership and February were around 10,400 leverage the opportunity. space in Belapur, Navi Mumbai. facilitator of office spaces, units and 10,200 units, respectively. • Andheri and Bandra Kurla signed a two-floor deal in Ackruti Complex (BKC) in Mumbai and Centre in Andheri East. Fractional the commercial districts of Navi ownership, assuring higher rental Mumbai witnessed increased yields, remained a popular trend popularity for pre-leased offices in in Mumbai. the studied quarter. New metro lines to Aerocity and FSI hike to improve connectivity spur realty expansion in in MMR Navi Mumbai The Metro Lines 2A and 7, scheduled The ongoing construction of 400 lakh for operations in May 2021, would sq ft of an Aerocity, an increased augur well for the northern pockets of Floor Space Index (FSI) of four, and Mumbai, including Oshiwara, Borivali the Metro Lines 1, 2 and 3 are likely and Andheri. Furthermore, the to drive housing demand in Panvel, 29 km-long Light Metro project Karanjade, Taloja and Kamothe, approved in Thane also came as a shot among others. in the arm and would connect some of the densely populated areas, such as Waghbil, Kolshet and Rabodi. 99acres India’s No.1 Property Portal MUMBAI’S REALTY AT A GLANCE Property Prices Rental Rates Demand Supply BUDGET-WISE DEMAND AND SUPPLY Key micro-markets across budget segments Budget Localities based on Average Average Rental Jan-Mar 2021 Range Consumer Demand and Property Prices Rental ‘Asks’ Yield Active Listings (Rs per sq ft) (Rs per sq ft/month) 19% Within Rs 40 lakh Nallasopara 3,920-4,890 10 2.24% Badlapur 3,330-3,800 8 2.42% 0% -19% Rs 40 lakh - Rs 1 crore Dombivli (East) 5,000-6,120 13 2.50% Kalyan (West) 6,100-6,860 14 2.48% Panvel 6,000-7,000 13 2.44% Rs 1 crore and above Kharghar 8,100-9,600 19 2.34% Kandivali (East) 14,150-16,730 34 2.47% Demand Chembur 16,500-19,000 44 2.92% Note: Rental Yield has been calculated for a 1,000 sq ft apartment. 40% 21%0% 30% 30% 30% 49% Supply Average property prices and rental rates have been calculated as per listings posted on 99acres.com in the studied quarter. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments. Within Rs 40 lakh Rs 40 lakh - Rs 1 crore Rs 1 crore and above BHK-WISE DEMAND AND SUPPLY Key micro-markets across BHK-configurations Configuration Localities based on Average Average Jan-Mar 2021 Consumer Demand and Unit Size Property Prices Active Listings (Sq ft) (Rs per sq ft) -15% 6% 1 BHK Dombivli (East) 500-600 5,000-6,120 Kandivali (East) 520-550 14,150-16,730 2 BHK Kharghar 800-950 8,100-9,600 Chembur 850-1000 16,500-19,000 Ulwe 980-1020 6,700-8,000 3 BHK Goregaon (East) 1100-1350 14,870-18,000 7% Manpada 1300-1400 10,700-12,600 Worli 1200-1400 34,500-36,200 Demand 2% 52% 37%0% 35% 41% 11% 18% 2% 4% Note: Average property prices and rental rates have been calculated as per listings posted on 99acres.com in Supply the studied quarter.