Q3 2022 Residential Market Overview – Mumbai-MMR

Sales Trend

Highest home sales recorded in MMR amongst the top 7 cities in Q3 2022. With over 26,400 residential sales recorded between July and September, the city had a minimal rise of 2% in sales volume from the prior quarter while seeing a 26% increase on an annual basis. About 72% of the residential sales in the city were in the Mumbai region, with Navi Mumbai coming in second with 16% of sales and Thane coming in third with 12%.

Looking specifically at the Mumbai market sales, Peripheral Central Suburbs sold 39% of the homes, followed by Mumbai Western Suburbs with sales of nearly 21% of the units. The lowest number of homes were sold in South Central Mumbai in Q3 2022, accounting for 7% of all sales in the Mumbai region.

Launches

MMR registers the highest number of new launches amongst the top 7 cities. Accounting for 39% share comprising 36,000 unit launches, MMR led among the top 7 cities in terms of total new supply in Q3 2022. New launches of MMR rose by 21% against Q2 2022 and by 118% against same quarter previous year. Amongst the three sub-markets of MMR – Mumbai, Thane and Navi Mumbai –  the Mumbai residential market contributed nearly 79% of new supply, followed by 15% in Thane and the rest in Navi Mumbai.

Mumbai Western Suburbs and Peripheral Western Suburbs saw the highest new supply within the Mumbai region, each contributing 3634 and 26% share individually. Around 72% of the city’s new supply is in the affordable, mid end and high end segments, individually contributing 22%, 29% and 21% of launches in the current quarter.

In ultra-luxury segment, majorly higher ticket size new launches witnessed, approx. 2000 new units have been witnessed in >4 Cr price range and rest 1600 units launched in 2.5 Cr to 4 Cr segment.

Available Inventory

MMR’s available inventory remains stable on Y o Y basis. As of Q3 2022, MMR has around 1.91 Lakh units available for sale. The city has the biggest share, contributing nearly 30% to the

overall available inventory across the top 7 cities in India. The city’s available inventory increased by 5% over the previous quarter while being unchanged on a Y o Y basis.

The Mumbai region accounts for majority of the available inventory approx. 74%, while Thane and Navi Mumbai each account for 14% and 13%. An aggregate 81% of the Mumbai’s available inventory is concentrated in Peripheral Central Suburbs (34%), Mumbai Central Suburbs (25%) and Mumbai Western Suburbs (23%).

Affordable, mid-end and high-end ticket sized units made for approximately 75% of the city’s available inventory, with individual shares of 26%, 24% and 25% respectively. MMR inventory overhang stays unchanged from the previous quarter, at 21 months as of Q3 2022.

Also Read: Q1: 22-23 Of 95K units in Tier 1 cities, MMR alone contributed 32K units

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By Varun Singh

Normally it is believed that the real estate industry of Mumbai Metropolitan Region (MMR) is way ahead of the other cities.

However, in terms of office leasing many cities have left behind MMR when it comes to office leasing.

These cities are way ahead of the west cities that comprises of MMR and Pune in office leasing.

So which are these cities? There are three cities that have beaten MMR and Pune in West and the National Capital Region (NCR) in the North.

According to Anarock Property Consultants, the cities that are dominating the office leasing spaces are the three cities from South of India.

The main Southern office market have overtaken other regions in terms of new supply, net absorption, and even rental growth. Among the top 7 cities, Bengaluru, Hyderabad and Chennai saw their share of total office leasing increase to 66% in FY21 (against 47% in FY18). The net office absorption in FY21 in the top cities was 21.32 mn sq. ft., and these three southern cities absorbed approx. 14.06 mn sq. ft. MMR and Pune absorbed 4.56 mn sq.ft (21%) and NCR 2.3 mn sq.ft (a mere 11% share.)

In FY18, 31.15 mn sq. ft. of office space were leased in the top 7 cities. Of this net absorption, the Southern cities collectively accounted for 47%, the Western region 33% and the Northern region 17%.

In terms of new office supply too, the Southern cities continued to ramp up their share – from 40% in FY18 to nearly 63% in FY21. Of the total new office space completion of 40.25 mn sq. ft. in FY21 across the top 7 cities, the Southern cities had a 63% share (approx. 25.55 mn sq. ft.). The office supply share of the main Western markets shrank to just 19% in FY21 (from 40% in FY18.)

Anuj Puri, Chairman – ANAROCK Group says, “The remarkable growth in the office market of these three Southern cities when viewed against their Western and Northern counterparts is directly attributable to robust demand by the IT/ITeS sector, affordable rentals, and the exponential growth of start-ups locally over the past few years. The manufacturing and industrial sectors are also driving demand here.”

Rental Growth: Notably, between FY18 and FY21, office rentals in each of the southern cities have also shown double-digit growth. In this period, office rentals in NCR remained more or less stagnant while MMR and Pune saw a mere 2% and 8% rental growth respectively.

• In Bengaluru, average monthly office rentals were INR 67 per sq. ft. in FY18 – they increased to INR 77 per sq. ft. in FY21 (up 15%)
• In Chennai, average monthly rentals stood at INR 54 per sq. ft. in FY18 – they rose to INR 60 per sq. ft. in FY21 (up 11%)
• In Hyderabad, average monthly office rentals rose from INR 51 per sq. ft. in FY18 to nearly INR 57 per sq. ft. in FY21 (up 12%)
• In MMR, average monthly rentals increased from INR 123 per sq. ft. in FY18 to INR 125 per sq. ft. in FY21 (up by just 2%)
• Pune saw average rentals rise from INR 63 per sq. ft. in FY18 to INR 68 per sq. ft. in in FY21 (up 8%)
• In NCR, average office rentals remained unchanged in both years at INR 78 per sq. ft

Also Read: MMR Unsold Inventory Overhang Dips to 43 Months in Q2 2021 From 55 Months in 2020

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By Varun Singh

CREDAI MCHI, in association with its Knowledge Partner CRE Matrix, today jointly unveiled the second edition of its research titled ‘MMR Housing Typology Report’, tracing the most pertinent homebuying trends of MMR residential real estate transactions since January 2017 – till date.

The research report shares a thorough and insightful micro-market analysis by dividing MMR into 8 key housing markets: CBD Mumbai, Central Mumbai, Central Suburbs, Western Suburbs, Eastern Suburbs, Thane, Raigad and Palghar.

With Mumbai one of the costliest property market in India with larger ticket sizes than anywhere else in the country, smaller houses (<2/2.5 BHK) in MMR remain consistently in demand – a trend that has continued for years.In Jan-Feb 2021 too, Rs 20,736 crores worth of houses were registered under the category, amounting to approximately 60% of the total value of properties sold in the same timeframe.

The key findings of the ‘MMR Housing Typology Report’:

– Central Business District (CBD)has witnessed a y-o-y growth (2020 as compared to 2019) in sales in terms of both number and value of units sold, despite year 2020 being a truncated year due to COVID-19. In Jan – Feb 2021, the >=4BHK category had the highest impact and share in terms of value of properties sold, with an average ticket size of Rs 13 crore.

– Central Mumbai region hashistorically witnessed majority ofsales (in value terms) coming from larger typologies. In Jan – Feb 2021too, >=4BHK category had the highest share in the value of units sold. In fact, the Rs 1,863 crore spent on 184 units in Central Mumbai is the highest amount observed across all of MMR.

– Central Suburbs is typology agnostic – as all types have contributed at least 15% in value terms in 2020. The highest contributor in terms of value of properties sold, though, was the 3/3.5 BHK category, at an average ticket size of Rs 3.6 crores. Eastern Suburbs, on the other hand, 2 – 3 BHK category had the highest impact (~60%) on value of properties sold, with an average ticket size of Rs 1.7 crore.Across Western Suburbs, <=2.5 BHK is the most popular category, contributing to over 84% of unit sales in 2020, a trend also witnessed in Jan-Feb 2021.

– Historically, while majority of sales in Thane have come from the 1/1.5 BHK segment, with an average ticket size of Rs. 30 lacs, but the 2/2.5 BHK category has emerged as the highest impact typology – contributing an avg. of 22% to units sold but 27% to total value sold.Moreover, the average unit price of 2/2.5 BHK typology in Thane has increased by 6% on a 3-Year CAGR basis to Rs. 54 Lakhs in 2020. Led by an increase in real estate development and enhancing infrastructure, we foresee a change in Thane’s buyer preferences in the future.

– In Raigad, the affordable segment market has witnessed almost 66% units being sold in Studio / 1 / 1.5 BHK segmentwith an average ticket size of Rs 27 lacs.

– Palghar has witnessed majority of sales happening in smaller typologies of 1/2 BHK segments, contributing 94% in number of units sold and 84% in total value sold in 2020. Going-forward, with Mumbai-Ahmedabad bullet train route passing through this region, it is likely to see an improvement in overall development and an increase in demand for larger typologies as well.

“We are extremely proud and delighted to unveil the second edition of CREDAI MCHI – CRE Matrix research report titled ‘MMR Housing Typology Report’. This report gives consumers an insight on housing typologies and trendsand also provides the developer fraternity a definitive course of strategic direction for future projects. With a new dawn of MMR real estate upon us, we look forward to partnering with industry stakeholders by facilitating an informed and knowledgeable real estate environment and making a decisive difference to enable Real Estate to lead the next chapter of growth for Mumbai and Maharashtra’s economy.”

CREDAI MCHI President, Deepak Goradia

Also Read: MMR Sold 4% More Homes in Jan-Sep 2020 Than It Did In Same Period OF 2018

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