www.99acres.com INSITE REPORT Mumbai 2018 July - September 99acres India’s No.1 Property Portal 99acres India’s No.1 Property Portal Contents From CBO’s Desk 03 CBO’s perspective on current market sentiment National Outlook 04 Snapshot of real estate ambience across top 8 metro cities Market Indicators 05 Changes in capital rates and inventory status QoQ; and rental values YoY Market Movers 06 News that impacted Mumbai's realty market in Jul-Sep 2018 99acres Outlook 07 99acres’ perspective on current market sentiment Navi Mumbai 08 Key highlights - Navi Mumbai's Capital and rental market in Jul-Sep 2018 Thane and Beyond 10 Key highlights - Thane's capital and rental market in Jul-Sep 2018 Mumbai 12 Key highlights - Mumbai's capital and rental market in Jul-Sep 2018 14 Annexures INSITE : MUMBAI 3 From CBO’s Desk The Indian real estate sector finally bid adieu to the prolonged impasse which started with demonetisation and worsened with RERA and GST ambiguities. Recovering property enquires, sales volume and prices were testimony to a progressive market sentiment. Barring Chennai and Pune, where average Maneesh Upadhyaya weighted property prices remained unchanged this quarter, Chief Business Officer all other metro cities witnessed the capital rates increasing 99acres.com marginally versus the previous quarter. Hyderabad remained at the forefront with a two percent rise in ‘ask’ rates. While unsold inventory trimmed in both new projects and resale markets, project launches in affordable housing segment gained momentum. Multiple efforts towards strengthening infrastructure, a pro-buyer regulatory environment in the country and unchanged interest rates are expected to push the housing sector on a growth trajectory with improvement in fresh supply and sales volume in the ensuing quarters. Methodology The Insite Report by 99acres.com captures the quarterly capital trends and the annual rental analysis of residential apartments in key real estate markets – Delhi NCR, Mumbai Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad. In order to assess the prevailing sentiment, the report delves deep into demand and supply of properties across varied budget segments and occupancy stages. While demand is a function of queries received, supply is based on property listings posted on 99acres.com in Jul-Sep 2018. 99acres India’s No.1 Property Portal NATIONAL OUTLOOK HOME BUYING SENTIMENT Buyer sentiment remained upbeat in all metros barring Kolkata where the ambiguous regulatory environment restricted sales. While Hyderabad witnessed increased property enquiries in the pre-election period, Delhi NCR, Mumbai and Bangalore merrily marched towards the festive quarter in hope of a realty revival with property sales improving this quarter. PROPERTY PRICES Except Chennai and Pune where prices remained unchanged, average capital ‘asks’ remained buoyant across metros in Jul-Sep 2018. Capital values in the premium segment remained under check due to a cumulative inventory overhang of over four lakh units. Hyderabad led all metros with two percent growth in prices, QoQ, owing to the recently launched RERA website. RENTAL LANDSCAPE The seven-quarter growth spree of the rental market continued in the eighth quarter with all metros reporting a spike in the average rentals by 3-5 percent. Mumbai, Bangalore, Pune and Hyderabad emerged as the frontrunners in the rental market. With a slow-paced revival in the capital market, rental growth is anticipated to continue in the forthcoming quarters. SUPPLY Cities continued to swarm with unsold inventory, albeit lower than the previous quarters but sufficient to restrict capital growth. Hyderabad had the lowest unsold stock, whereas Delhi NCR and Mumbai led the pack with 1.5 lakh and 80,000 units lying unsold, respectively. The controlled pace of new launches and slow-paced RERA registrations curtailed the saleable primary inventory. INSITE : MUMBAI 5 MARKET INDICATORS Capital Values Rental Values Supply Bangalore ˄ ˄ ˅ Delhi NCR ˄ ˄ ˅ Mumbai ˄ ˄ ˄ Chennai ˄ ˅ Pune ˄ ˅ Hyderabad ˄ ˄ ˄ Kolkata ˄ ˄ ˅ Ahmedabad ˄ ˄ ˄ * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com IN FOCUS GST ANNIVERSARY June 1, 2018 marked the first anniversary of the replacement of the archaic tax policy with the unified tax system - Goods and Services Tax (GST) in India. The realty sector, which landed in the 12 percent tax bracket, was freed of multiple taxes such as VAT, Service Tax and Central Excise. Input Tax Credit (ITC) and the anti-profiteering clause were the two most benefitting features of the new tax system. PROPERTY PRICES Ambiguities regarding Input Tax Credit and its mode of payment kept the buyers wary of investing in under-construction properties. Despite causing a shift in buyer preference towards ready homes, GST did not trigger a downward price correction. Exclusion of Stamp Duty and Registration charges from GST increased the total cost of owning a house by 3-4 percent. AFFORDABLE HOUSING The slash in the GST slab from 12 to eight percent firmed buyer’s confidence and demand for the country’s flagship program – Pradhan Mantri Awaz Yojana (PMAY). Although a significant impact on property sales has not been noted, the rate cut has helped improve buyer sentiment. The move is expected to propel transactions in the affordable housing segment in the longer run. RENTAL MARKET The extension in the monthly limit of maintenance charges to Rs 7,000 for levying 18 percent GST, and on the annual threshold limit from Rs 10 lakh to Rs 20 lakh for the applicability of GST on rent attracted from a commercial property or from a residential property used for commercial purposes, eased the tax liability on property owners. 99acres India’s No.1 Property Portal Market Movers Govt approves four new infra projects MahaRERA uses GIS technology to in Mumbai map realty projects The State government approved infrastructure The successful mapping of over 4,500 projects such as the expansion of Mumbai- registered projects by Geographical Pune Expressway, and development of the Information System (GIS) helped buyers use Bandra-Versova sea link, Thane Creek Bridge the ‘view on map’ facility on MahaRERA’s 3, and Bhiwandi-Kalyan-Shil-Phata road. In website. The technology is instrumental in addition, two new metro rail projects – Dahisar providing details regarding social infrastructure to Mira Bhayander and Andheri-Chhatrapati available near the projects, helping Shivaji Maharaj International (CSMI) airport homebuyers finalise their purchase. have also been approved. Mumbai to witness single-window State proposes 1 percent surcharge approval system soon on stamp duty The proposal to execute single-window The State government’s proposal to levy clearance in Mumbai cheered stakeholders as one percent additional surcharge on realty it will expedite the building approval system transactions in addition to the existing five and keep a check on corruption. Faster percent stamp duty is expected to inflate approvals and smoother completions property values, thus hampering consumer will help reinstate the faith of sentiment and posing as a hindrance to sales. homebuyers who are dismayed by incessant project delays. MahaRERA takes stringent action against unregistered projects Tightening the noose on local authorities, MahaRERA released 85 letters to the commissioners and collectors to take quick action against unregistered projects. In the last one year, nearly 16,000 projects have been registered under MahaRERA. The step is expected to expedite the registration of the remaining projects in the State. INSITE : MUMBAI 7 99ACRES OUTLOOK Mumbai’s real estate market seemed to have regained momentum with new launches doubling in numbers in Jul-Sep 2018 in comparison to the same quarter previous year. Thane bagged the maximum share of new projects launched in the city. The stake of new affordable housing inventory also rose close to 60 percent in the quarter. Overall, the city recorded a growth of seven percent in total availability of new and resale apartment stock. While unsold inventory, particularly in the higher budget segments, kept a downward pressure on average property values in most regions, some pockets in Thane managed to record modest appreciation in average capital ‘asks’. Housing demand gained steam and sales finally started recovering, but not enough to give developers the confidence to alter 'ask' rates significantly. Some resale heavy pockets in Navi Mumbai and South-Central markets also witnessed price corrections up to five percent due to sluggish offtake of the existing inventory. The rental segment, however, performed well across Mumbai, Navi Mumbai and Thane, recording an average growth of five percent, YoY. Strong hold of MahaRERA ensured that the developers adhered to the mandates, buoying buyer sentiment and ensuring growth in housing demand in the ensuing quarters. While Ganesh Chathurti had minimal impact on the sales volume, the upcoming Navratri and the subsequent Diwali months may witness developers rolling out attractive offers to augment sales. Price Movement in Key Micro-markets LOCALITY AVERAGE ‘ASK’ RATE (PER SQ FT) QOQ CHANGE YOY CHANGE Panvel 5,700 - 6,300 4% 6% Kharghar 7,500 - 9,100 2% 8% Ulwe 6,300 - 7,300 2% 9% Dombivli (East) 5,100 - 6,100 2% 4% Kalyan (West) 5,200 - 6,300 0% 1% Badlapur 3,000 - 3,700 -1% -1% Andheri (West) 19,100 - 23,300 -1% 1% Virar 4,000 - 4,500 1% 0% Kandivali (West) 13,000 - 15,200 3% 1% Kandivali (East) 12,900 - 15,600 -1% 1% * Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter 99acres India’s No.1 Property Portal NAVI MUMBAI KEY HIGHLIGHTS Navi Mumbai bloomed with real estate activity and the launch of several Navi Mumbai’s real estate scenario affordable residential projects. Localities closer to the upcoming airport is set for a new beginning as the benefited the most with increased demand from bugdet homebuyers. groundwork for the International Airport has been laid.