By: Ravi Sinha
To say that the year 2015 has not been very excisiting for the real estate market across the Mumbai Metropolitan Region (MMR) would be stating the obvious. The slowdown in the macro-economy, wait & watch by the homebuyers in the property market, relatively higher cost of borrowing till late and fate of reforms oriented policies hanging in uncertainty all collectively dampenend the property market in Indiaâs financial capital. Will the year 2016 be any different?
There are multiple of reasons that suggest the year 2016 is poised to come with lot more optimism. It is not just an optimism on the eve of the new year but the geround realities also suggest everyone has valid reasons to feel excited for the property market in the year ahead. Among the many reasons four stand out as the key catalyts that promise to revive the property market in general and the housing market in partiucular across the MMR.
First and foremost the new DCR (Development Control Regulations) that is on the cards promises to be quite development friendly. New DCR itself promises to redefine the skylines of Mumbai. Secondly, from ther homebuyersâ point of view the interest rate has gone down in recent months and indicates to go down further low. This is added by lower inflation and better job market across the city. Thirdly, the decks have been cleared for the formation of a real estate regulator by the Union Cabinet which is a comfoting factor for the apprehensive homebuyers. And, last but not the least, the market is poised as an equal opportunity market for both the homebuyers and the developers at the moment. Probably the Mumbai property market never had as many ready-to-move-in options as is now.
Developers also confirm this change in outlook and change in sales velocity. Manju Yagnik, Vice Chirperson of Nahar Group agerees that the last quarter has seen an overall increase in demand by 28 per cent over the same period in previous year. This was due to various schemes and offers floated by the developers during festival season. The industry, even during the rough phase, has seen demand for homes at the right place with right price point. The demand & supply scenario in the city indicates better absorption ahead.
âIn terms of the promising locations, I feel in 2016 Eastern Suburbs in Mumbai will see a surge in activity in real estate with offerings across segment. This area is developing fast and has good connectivity to WEH, MIDC & SEEPZ via JVLR, BKC via SCLR. Also, there are ample of land parcels being considered for development here for Metro connectivity and affordable housing,â says Yagnik.
Sandeep Ahuja, CEO of Richa Realty believes the passage of real estate bill will boost the sentiments of the consumer and create a confidence amongst the homebuyer and investment community. The cabinetâs approval will Â witness a cheer from the developersâ community too which will eventually have positive impact in 2016.Â In the next financial year, he foresees emergence of affordable luxury segment across metropolitan cities which will cater to needs of middle and higher middle class. Mumbai, of course, will be the demand driver of the segment.
âThe customers of affordable luxury have been sitting on the fence for a long time in expectation of a price correction. However, this set of homebuyers has realized that whatever price correction was to happen has happened and now if someone needs to purchase a house for end use, he must do it now. As a trend, affordable luxury will be a game changer as these houses meet both the affordability and luxury quotient desired by the new-age homebuyers. These projects would be mostly strategically located with Â small size houses with good amenities falling in the price band of Rs. 70 lakh to Rs. 1 crore,â says Ahuja.
In terms of hot locations, it is believed that locations like Andheri (E), Chandivali, and Eastern Suburbs starting from Vikhroli to Thane has a lot of attractive opportunities for potential homebuyers in each and every segment of housing. There are on-going and upcoming projects from some of the reputed developers. Navi Mumbai will also emerge as an investment hotspot Â as it is set to be the Smart City close to Mumbai. Â For low-ticket entry the homebuyers can also explore areas like Karjat.
However, everyone within the built environment of Mumbai real estate is bullish on Thane market and beyond Thane areas, due to and ever-improving social and physical infrastructure.
The outlook on the amenities in and around a housing project has also seen change in preference across the Mumbai region, of late. Existing amenities and infrastructure like an international school, a medical centre, a business centre, a supermarket, shopping plaza and restaurants to take care of more than 70 per cent of homebuyersâ needs in a day to day life is a taken reality today. So is swimming pool, health club, gym within the project that adds to the quality of lifestyle and improves social standing.
However, in 2016 once the proposal for Smart Cities is approved by the government, large format townships will get a boost. These will be more of a self-sustained city within a city and Navi Mumbai might add to its attraction quotient. Of course, the effect of this would be felt across the MMR region as the homebuyers expectations and aspirations will go further up.
The homebuyersâ aspiration level has anyway gone up in recent times and many developers nowadays are open to customize the housing units for them even in the affordable housing to give them a sense of luxury. That is emerging as a new trend on the eve of 2016 in Mumbai.
Tech savy smart homes with community wifi in the project is another âIn Thingâ in Mumbai property market on the eve of 2016. In a nutshell, the year 2016 will see some paradigm shift in the project offerings to give the homebuyers a holistic experience. Collectively, all these emerging trends and improving macro-economic outlook with some key changes on the cards in the overall eco system of real estate indicates that 2016 would be the year to watch out for in the property market of the city.
Â Hits of the year
- Interest rates are down
- Property prices have bottomed out
- Inflation on the lower side by the end of the year
- Better job market indicating better purchase power of homebuyers
- Customisation of apartments no longer prerogative of only luxury homebuyers
Misses of the year
- Low absorption of housing stock across MMR
- Inventory overhang across Mumbai
- Lesser new launches in 2015
- Very slow pace of price appreciation
- New Development Control Regulations (DCR) expected to be development firendly
- Decks cleared for the formation of a real estate regulator
- Large format townships to emerge once smart city plan is finalised
- Ready to move in apartments available in the market