)
Not a single residential project has been launched in the premium segment (priced more than Rs 5 crore) in Mumbai so far in 2015, says a new report by Knight Frank.
“Besides the factors that impacted the overall Mumbai market, the high-ticket size in premium markets made buyers draw value preposition parallels with relatively affordable markets in western and central suburbs,” said the report.
In comparison, the total housing market in Mumbai saw a 47 per cent drop in new launches in the first half (H1) of 2015. “Housing sales of 28,446 units and launches of 18,887 units made H1 2015 the worst half-yearly period in the post-global financial crisis era,” it said. Though the premium segment had seen a growth of 22 per cent in the first half of 2015 calendar year at 795 units, the segment contributed to less than two per cent of the Mumbai demand-supply dynamics, the report noted.
The price rise in the premium markets remained muted at two per cent in H1 of 2015, compared with three per cent growth in H1 of 2014. Premium projects would take 14 quarters to sell unsold inventory, the report said, adding the overall market would take 12.1 quarters to sell inventory. Unsold inventory in the market had declined from 204,070 units in H2, 2014 to 194,510 units in H1, 2015 due to a sharp reduction in launches, it said.
The weighted average price in Mumbai metropolitan region increased by a modest 2.5 per cent in H1 of 2015 against eight per cent a year ago. “Going forward, in H2 of 2015, we estimate modest improvement in demand and supply — coinciding with stagnation on the price front,” it said.
The report added that a gradual improvement in employment outlook and lower consumer inflation and housing loan interest rates would augment demand in H2 2015, resulting in housing sales of 34,135 units – up 20 per cent sequentially.
