Oct 20 2020
With the COVID-19 crisis underlining the importance of owning a house, the Mumbai Metropolitan Region (MMR) comprising the residential markets of Mumbai, Thane and Navi Mumbai witnessed positive demand growth with prices remaining largely stable possibly on the back of the government’s decision to cut the stamp duty, reports the latest Magicbricks PropIndex Report for the July-September 2020 quarter.
The report suggests that Mumbai witnessed a significant increase of around 52% in searches for residential homes in July-September quarter that had in fact decreased by around 37% in the April-June period of 2020. Showing a clear shift towards slightly bigger homes, property searches in Mumbai for mid-sized homes including 2BHK and 3BHK surpassed the 1BHK configuration, with the share of 1BHK shrinking from 44% (Jan-March) to 37% (April-June), and now to 36% (July-September).
In Navi Mumbai, online searches for houses grew 43% in the quarter ending September 2020, against a decline of 55% in the Apr-June 2020 quarter even though majority of the developers resisted any significant price correction or discounts on account of the economic slowdown. The reduction in stamp duty to 3% (from 6% earlier) could be one of the influential drivers for this demand growth. Similar to most other markets in MMR, developers in Navi Mumbai also focused on completing ongoing projects rather than launching new projects amid a financial crunch.
Like other MMR markets, Thane also saw demand improving due to improving infrastructure and connectivity to Mumbai. With searches growing to the tune of 44% QoQ during the July-Sept quarter 2020, against a 33% dip in April-June, Thane continued to be one of the most favoured real estate destinations in the MMR region. Thane also witnessed marginal price growth of 1% in July-Sept, following a decline of 0.6% in April-June.
Commenting on the PropIndex report, Sudhir Pai, CEO, Magicbricks, said, “The next 6-8 months are crucial for the revival of residential sector. The onset of the pandemic and the ensuing lockdown have changed consumer preferences. Today, the shift is towards affordability as home buyers have reduced their budget but they haven’t changed their preference in terms of BHK or size. With the festive season just around the corner, we are witnessing a sharp recovery in demand and prices have remained stable for the July-September quarter. This augurs well for the industry and we hope consumers’ buying sentiment will continue to improve and translate into transactions in the coming quarters.”
It is interesting to note that in Mumbai, as per Magicbricks data, market dynamics are enhanced in the July-Sept quarter vs. April-June quarter with demand almost in line with the supply across all price brackets. Now, as serious buyer enquiries are rising, developers can convert this demand into transactions by fulfilling the buyers’ requirements. Magicbricks data also showed an increase in demand for localities priced between Rs,10,000-20,000 persqft such as Andheri, Goregaon, Malad, Kandivali, Borivali, Kurla, Powai and Bandra ascribing to the growing IT/ITeS and other commercial presence surrounding these.
Another good news for affordable housing segment: The Exclusion Plan cleared in Sept 2020 would allow residential development on around 9,150 acres of land earlier marked as No Development Zone in the suburbs. This would result in an influx of affordable housing units in areas such as Dindoshi, Malad, Charkop, Vikhroli, Nahur,and Mulund. Further, the lowering of Repo rates to 4% in May 2020 from 5.15% in Feb 2020 resulted in cheaper home loans, providing more purchasing power to buy larger homes or homes within the city limits.
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