#2018 Wrap-Up: How Will Mumbai Real Estate Fare in 2019?

Mumbai has witnessed rapid urbanisation over the last two decades. So much so that the city has now expanded to include the Mumbai Metropolitan Region (MMR) which comprises of Greater Mumbai, Navi Mumbai, Thane, and the two peripheries, namely, western peripheries suburbs and the central peripheral suburbs.

MMR, today, is one of the largest real estate markets in India. It contributes about 25% of the overall supply across the top metro cities.

So, how was the year 2018 for MMR? RoofandFloor data reveals that about 3,000 projects were launched in the region this year. This was the year of affordable housing, and not surprisingly, out of the total new supply, 48% was in the affordable segment (less than Rs 40 Lakh), 34% in the premium segment (Rs 70 Lakh and above), and 18% in the mid-segment (Rs 40-70 Lakh).

“We feel affordable housing will be the growth driver for the real estate sector in the near future as it will provide opportunities both for developers and homebuyers,” says Amit Ruparel, Managing Director of Ruparel Realty.

In terms of BHK configuration, 1BHKs and studio apartments ruled the roost with maximum supply (47%), closely followed by 2BHK apartments.

Micro-markets such as Malad, Kandivali, Nerul, and Byculla saw a number of new projects launched in 2018 with growing demand from homebuyers.

Major infrastructure upgrades of 2018

According to The Ease of Living Index (an initiative of the Ministry of Housing and Urban Affairs) Survey 2018, Mumbai tops the physical infrastructure segment among all cities in India. This segment includes aspects such as infrastructure, transport, housing, and pollution levels, among other parameters.

Additionally, the state government has also extended its support to real estate development by revising its policy to allow developers to utilise the available land parcels. They have also included unutilised land in special economic zones, land under environmentally sensitive zones, and afforestation areas to unlock the maximum development potential of the land.

The below infographic shows some of the significant upcoming infrastructure projects.

Unsold inventory continues to be an area of concern

Market reports suggest that unsold inventory in the MMR remains the highest across metros. As of September 2018, the numbers stood at 283 million sq. ft, which will take about 51 months of sales to clear.

Maharashtra leads the way in RERA implementation

Maharashtra was the first state to adopt the Real Estate (Regulation and Development) Act (RERA). It also has one of the most comprehensive and updated RERA websites.

Affordable housing to dominate the sector in 2019

Real estate made a strong comeback in 2018 with sales of residential properties seeing robust demand.

Amit Ruparel admits that Ruparel Realty is also going to focus on this segment next year.

“After the success of our affordable housing project – Ruparel Optima – we are also planning to launch a few more affordable projects in 2019,” he said.

Additionally, there would be continued consolidation in the market, increased private equity investments, and steady sales momentum as reforms pave the way for increased transparency in the sector.

“We also anticipate more green buildings and green spaces coming up next year,” adds Amit.

In terms of location, Kurla, Chembur, and Tilak Nagar are the future growth corridors for homebuyers in Mumbai.

These localities are close to the business districts of the city, and hence there is increased demand from the professionals working in and around the area. Additionally, property rates in these localities are relatively lower when compared to other areas.