Mumbai Flat Sales Down But Prices Up – No Price Correction!
Today’s Times of India reported that Flat sales in Mumbai Metropolitan Region (MMR) is down by 17% but the prices are up by 10%. Despite all the correction that people expect in Mumbai’s Realty Market, prices are only going up. There seems to be no correction anywhere in sight. It defies all logic.
Mumbai Flat sales last year fell by 9%, a five-year low. Residential project launches too plummeted by a steep 43%, though the region registered the highest sale of flats among six of the country’s major metros and cities, the rest being Bengaluru, Chennai, Pune, Hyderabad and the National Capital Region (NCR).
However, even as the sales plummeted, the prices in Mumbai went up by 10%, the maximum across all cities-in the same period. The findings are in Knight Frank India’s real estate outlook report, which was released on Wednesday .
The report also says that there is a 23% vacancy in office premises in the MMR, which is the highest in the country. Bengaluru’s commercial spaces vacancy , at 10%, is the lowest. The garden city’s residential market in terms of sales volume is next only to MMR’s. In Bengaluru, 55,700 flats were sold last year, compared to MMR’s 67,715. But the National Capital Region took the biggest hit, registering a sale of 40,575 flats, a drop of 43% from 2013. Knight Frank India’s real estate outlook report report released on Wednesday shows that the Mumbai Metropolitan Region (MMR) saw a steep fall of 9% in apartment sales in 2014 even though it registered the highest sales among Bengaluru, Chennai, Pune, Hyderabad and the NCR. The MMR had 2.04 lakh unsold flats by 2014-end while the figure for all six cities was 6.47 lakh.
Knight Frank’s chief economist Samantak Das said the second half of 2014 showed a steady increase in sales in the MMR, 36,500 compared to 32,700 in the same period in 2013. “This has led to a marginal lowering of unsold inventory levels. We foresee the market to show further signals of recovery in the next six months,” he said.
The report said residential prices showed a positive growth in the second half of 2014 across all cities. The maximum rise was in Mumbai, which experienced a 10% year-on-year growth. MMR recorded a weighted average price (WAP) of Rs 7,800 per sq ft in the second half of 2014, compared to Rs 7,085 per sq ft in the same period in 2013. The lowest increase–3%–was in NCR, where the WAP went up from Rs 4,330 per sq ft to Rs 4,444 per sq ft. Residential launches and sales across the six cities were at a three-year low during July-December 2014. Sale volumes fell by 17% last year, while new launches dropped by 28% in all six cities put together.
On office space vacancy , Das said, “Vacancy levels will move in the narrow range of 22-23% in the coming six months at the back of an increase in new completions in MMR. Business districts in central Mumbai and Bandra Kurla Complex is likely to experience an increase in rent owing to receding and controlled supply pipeline.”