Among the projects where sales were robust are Kalpataru’s ‘Radiance’ in Goregaon as well as in Vakola, Radius’ project in Chembur, Omkar’s residential offering in Kurla and Goregaon, and Lodha Developers’ Amara project in Thane
On the back of new launches in the suburban regions, sales volume has recovered significantly after two years of lull in Mumbai, which is now leading the overall residential revival across the country along with Bengaluru.
“Sales have improved significantly in the western and north of western suburbs in Mumbai,” said Samantak Das, chief economist and national director at Knight Frank India. Sales in project launches in areas like Chembur, Kurla and Thane picked up according to different channel checks. On an average, developers have been able to sell 15%-20% of the units launched in one go, said Sumit Jain, national director at Colliers India, signaling a clear uptrend. Although far from the bumper sales that were characteristic of a buoyant market, significant at a time when some companies have sold apartments in single digits in some quarters.
To be sure, estimates published at the end of the last calendar year had said overall unit launches decline in excess of 60% in the previous two years so the measure of the current launches is against a low-base. Still, no doubt, there is a surge in demand for smaller ticket size offerings that was tailor made for end users.
Among the projects where sales were robust are Kalpataru’s “Radiance” in Goregaon as well as in Vakola, Radius’ project in Chembur, Omkar’s residential offering in Kurla and Goregaon, Lodha Developers’ Amara project in Thane and Rustomjee’s township project, also located in Thane. In these areas, ticket sizes of apartments are below R2 crore. Apartments that are priced under R1 crore in Thane and under R2 crore in the suburban areas will be fast selling; above this price bracket are laggards to recovery, Jain said.
A Knight Frank India report said between January and June, 68% home launches in Mumbai were priced below R2 crore.
Earlier in the year, Radius Developers sensed a unique opportunity in the price bracket just south of R1 crore, often a psychological barrier among working professionals. Ashish Shah, COO at Radius Developers, said the objective was to innovate and liquidate stock at all costs. The company then launched 350 sq ft studio apartments, priced at about R70 lakh, which seems to have been right on target. In a slump market, people are putting their money in cubby holes, making do in 650 sq ft of two bedroom apartments so long as the monthly outgo seems affordable at a time when corporate earnings, consumer savings and sentiment have all taken a nosedive.
The most important factor for consideration is the ticket size, closely followed by the brand name, said Gaurav Gupta, director at Omkar Realtors.
Mumbai as a market has always had a reputation of being one of the most exorbitant real estate markets; the mainstay of luxury apartments. Prices offered by the larger builders have mostly pandered to the ultra rich, leaving out the massive working class population. Studio apartments and two bedroom-hall-kitchen sets are high fliers; suddenly a section of people that felt the soaring prices of the city are out of reach have choices in city-centric locations.
Also, experts pointed out roads are not widening in some of the more expensive locations leading to bumper to bumper traffic at all times, which is also drumming down the aspiration quotient of living in these areas. “The infrastructure in some of the micro markets like Lower Parel and areas in south Mumbai is so choked that people don’t want to dig a hole in their pockets to live there anymore; they can consider a number of choices in the suburbs, where infrastructure is now much better,” said Jain.
Interestingly, the new launches in the past six months have not offered discounts. Experts said discount schemes and gimmicks are becoming a thing for those projects that are not priced right and have a high level of unsold stock; consumers prefer a direct price bargain.