The report says that the glut in the realty market of the Mumbai Metropolitan Region (MMR) will continue. "The reform in the housing sector has failed to revive the market," stated Knight Frank India's report.
The launch of new residential projects was down 20% in 2015, while the sale increased marginally by 3%, the global property market and research firm Knight Frank India's report revealed on Thursday.
The report says that the glut in the realty market of the Mumbai Metropolitan Region (MMR) will continue. "The reform in the housing sector has failed to revive the market," stated Knight Frank India's report.
According to report, in 2015, new launches were down by 23% compared to 2014. "The demand has shrunk by 6%. The property prices are stagnant. It has registered a marginal increase of 3%. This is the good time to buy the new home," the report stated.
Interestingly, the budget housing between Rs 30 lakh to Rs 60 lakh are always in demand, now reported in distress in Navi Mumbai, and peripheral of the central and western suburbs. While demand in Thane has slightly up by the 13%. The premium South Mumbai market witnessed a 108% jump in new project launches to 208 units in 2015.
Dr Samantak Das, chief economist and the national director – research, Knight Frank India said, "The residential market in the MMR has been experiencing a steady fall in new launches. There was a 23% decline in new launches in 2015, compared to 2014. During the second half of 2015, sale of housing units dropped by 6% year-to-year.
For the first time since 2008, the demands for office space has exceeded than supply in MMR; office absorption is at 130% of supply in 2015. The information technology industry emerged as the top occupier of office space in the MMR, contributing 46% of the demand in 2015.
Viral Desai, director, Knight Frank India, said, "We have witnessed a robust office space demand with 7.5 million sq.ft. of annual absorption in 2015. The overall market observed big deals across IT and Pharmaceuticals space, some of the largest office deals ever seen in Mumbai. There is a shortage of quality office space in the city; however, it is not visible in the peripheral areas. Outlook for 2016 is a further decline in supply making it a favourable landlord market. However, in next 6 months we do see a gap in terms of expectations of tenant and landlord given the corporate earnings is sluggish and rents are likely to increase gradually in select micro markets due to declining supply," Desai said.
Prakash Baviskar, president of Maharashtra chamber of housing industry, Navi Mumbai said that the Cidco – the state government nodal agency – is solely responsible for current market scenario. "There are huge demand of land to construct the affordable houses. Cidco, however, has not been releasing the land as per the demand. That creates the shortage of the affordable houses also in Navi Mumbai," Baviskar said.
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