Mumbai’s real estate market is always fluctuating. It’s a region where 28% stock falls under apartments and the rest is a controversial slum rehabilitation, commercial etc.
Those who are looking at quick profits should not invest in properties because realty prices are not expected to rise sharply. Says Anuj Puri, Chairman and Country Head, JLL India: “Though many buyers have been waiting for real estate prices to correct, it is unlikely that any large scale ‘shock disruption’ is imminent.
After the change in the government, expectations were high, that there might be some new lease infused in this sector. But apparently, nothing as such has happened so far.
Sanjay Dutt, Managing Director, India, Cushman and Wakefield agrees: “While we expect the situation to maintain a ‘status quo’ during 2016, the impact of these developments will gradually set in towards the end of 2017 or early 2018.”
There has been a positive revival of commercial projects, compared to residential.
This is the same scenario Mumbai faced in 2011. Government changed the measurements from super built-up to carpet area. The flowers beds, terrace areas, etc all were regularized. Mumbai real estate market took another 1.5 years for things to start moving once that clarity came in the picture. We will be facing the same time line this time.
“There are well-understood pressures on the demand side but I think the supply pressures on the cost and project approvals are less understood. So however a developer chooses to respond to the current situation, the question you need to ask is, how will a fresh round of supply get created? Because no developer is going to launch projects at a lower price to lose money” summed up the unassuming and straightforward Pirojsha Godrej.
Majority of the unsold inventory, Anita Arjundas countered, is in projects which have been lying idle. “It is important to see is where that inventory is located, What stage of construction and execution it is in? Many of the projects have done no construction for the last three to four years and have been sitting there as almost idle projects. Therefore, there is a complete stop both in terms of sales and construction on those projects. Having said that, sales have slowed down and inventory levels are higher that what the industry is comfortable with “, interviewed by Manisha Natarajan.
In the end, real estate is a buyer’s market. All the projects which were started in 2015 and are being sold in 2016 will sell at a slow pace. Resale properties that are in the market will get absorbed as long as they are priced correct. As mentioned above, it is a buyer’s market and one cannot face loss in a city like Mumbai where real estate is one of the major sectors.