The first quarter of 2015 witnessed the launch of the second highest number of housing units since 2010, during which 21,000 were launched.
In January this year, a leading international rating agency certified Mumbai as the second most liveable city in India. However, it is no secret that the city features in the lower rungs of the 'affordable' scale when it comes to property rates. Now, prospective buyers have reasons to cheer as developers have decided to slash the prices of houses; the catch is that the size of these houses will also be reduced.
After the lukewarm response to luxury and ultra-luxury apartments, developers in Mumbai have decided to cut the size of the houses, as well as their prices, so that more buyers can afford to purchase the flats.
According to Liases Foras, a Mumbai-based property research firm, developers are launching the residential projects to fit the demand of potential buyers.
Earlier, developers would construct houses with large balconies and expansive flower beds, along with state-of-the-art amenities. Since the cost of these were exorbitant, there would not be any buyers. As a result, inventory of these apartments have piled up, explained Pankaj Kapoor, managing director of Liases Foras.
As many as 1.69 lakh housing units are unsold in Mumbai metropolitan region, including 59,000 from Mumbai. Kapoor explained how the real estate industry could be boosted, saying: "So, builders are reducing the size of the apartments to suit a larger section of buyers," he said, adding that the weighted average prices have plummeted from Rs20,449 per sq ft in 2014 to 20,087 per sq ft now.
"Besides, the average 2 BHK flat cost has also decreased from Rs1.32 crore in 2014 to Rs1.29 crore in 2015. This cut in prices will help boost the housing sale," said Kapoor.
The first quarter of 2015 witnessed the launch of the second highest number of housing units since 2010, during which 21,000 were launched. "This year, it was 17,000, as against 10,000 last year. It is a sign that the developers are understanding the matrix of the market. It will definitely revive the sluggish property market," Kapoor added.
The residential projects that have been launched cover most of the MMR, including Dombivli, Kalyan, Panvel, Mulund and central Mumbai.
Manohar Shroff, secretary, Maharashtra Chamber of Housing Industry (Navi Mumbai) told dna that Panvel is the epicentre of new launches. "Most of the branded developers, including Kalpataru and Lodha, are starting their projects in Navi Mumbai. Besides, Cidco is also developing about 600 kms of Naina – the modern city," Shroff added.
Sunil Mantri, chairman, National Real Estate Development Council, said that each year, there is an 8-10 % rise in property prices. "This year, the prices have been quite stable and competitive, so buyers have more choice. Builders are absorbing the increased input and premium cost by keeping prices steady. Besides, interest rates are also falling, which makes it the perfect time to buy houses," Mantri said.
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