MMR Real Estate reaches new peak in 1HCY24
In a nutshell
- MMR is the largest residential market in terms of sales value in India.
- 1HCY24 witnessed sustained growth in residential sales driven by growing propensity among buyers to purchase homes, favorable economic growth, rising disposable income and improving infrastructure landscape.
- Developers anticipating sustained healthy demand in residential sales have been aggressive in their growth strategies acquiring land parcels.
- The upcoming and planned infrastructure expansion projects should also complement this positive real estate momentum.
City at a glance:
Mumbai is the financial capital of India with around 40% of Indian taxpayers residing in Mumbai.
- Mumbai has a diversified economic base, with sectors such as business services, trade and transport, manufacturing, BFSI and IT being the major job creators and economic drivers.
- In 2023, Mumbai’s household disposable income was INR 12.8 lakh which is among the highest compared to all cities in India.
- Mumbai has a young population with ~74% of the population in the working age group (15 – 64 years) and only 7% of individuals over 64 years in age.
- MMR (Mumbai Metropolitan Region) which comprises of Mumbai city, Navi Mumbai, Thane, Kalyan Dombivali, Vasai Virar, Mira Bhayandar, Bhiwandi is one of the major economic drivers of India.
- MMR is undergoing a comprehensive infrastructure transformation which is expected to significantly improve connectivity between the main city, suburbs, extended suburbs and major commercial hubs. The Government’s investment in multi-modal infrastructure projects is expected to transform the city into a global services hub further boosting real estate prospects in the city.
MMR Real Estate
- MMR is one of the leading residential markets in India contributing 25% of new launches and 22% of overall sales in India during 2022-1H2024.
- Expected time to liquidate unsold residential inventory in MMR decreased by ~47% during 2022-1H2024.
- Real estate players have acquired (outright or through joint development agreement) more than 260 acres of land in MMR in recent years for residential projects with a development potential of ~42-48 MM sf and sales potential of ~ INR 70,000 crore.
- MMR which is home to many domestic and multinational companies comprises of ~19% of the overall Grade A office stock in India. Andheri Kurla belt is one of Mumbai’s largest business districts with 13% of operational office stock.
- MMR is only the second city amongst top 6 cities in India where vacancy levels showed improvement between 2021-1H2024 (MMR’s vacancy levels improved by 3.6%).
MMR Residential market
- Over 1.15 lakh property registrations done during the first 10 months of this year (Jan-Oct 2024), already reaching 90%+ of registrations done in CY23.
- Maharashtra government’s revenue from property registrations from Jan to Oct 2024 has touched close to INR 10,000 Cr, also already reaching 90%+ of revenue from registrations done in CY23.
- As per JLL, residential sales value is expected to increase in CY24 by 15% y-o-y.
- 1HCY24 recorded highest ever half yearly sales.
- In 1HCY24, sales grew by 29% y-o-y while launches grew by only 1% y-o-y.
- YTS(1) (expected time to liquidate the unsold inventory) also dropped to a record low of 2.6 years in 1HCY24, down from 2.8 years in the previous year.
Transforming MMR’s infrastructure landscape
- MMR is currently amidst major revamp in the city’s physical landscape promoting economic growth and enhancing connectivity.
- Projects like the Mumbai Trans Harbour Link, coastal roads and completion of some metro lines have boosted connectivity and enhanced accessibility to major commercial hubs.
- The government’s investment in multi-modal connectivity projects (integrating different modes of transportation such as road, rail and ports) is expected to ensure better connectivity across the city in coming years.
- Opening up of Metro Line 3 (Phase 1- BKC to Seepz) provides direct connectivity for the residential clusters in Andheri-Kurla belt to the airport and commercial hubs of BKC.
- The planned Mumbai-Ahmedabad bullet train will also strengthen connectivity to commercial hubs like BKC from Vasai-Virar, Virar station being one of only 4 stations planned in Maharashtra, along with BKC, Thane, and Boisar.
- Below image captures the current infrastructure landscape and proposed infrastructure landscape in 2030:
(1) Years to sell (YTS) is calculated as the number of years to sell the unsold inventory considering the rolling 4-quarter average sales
References
- Hindustan Times Article – https://www.hindustantimes.com/real-estate/diwali-2024-record-11-861-properties-registered-in-mumbai-in-october-2024-a-21-spike-compared-9-736-in-diwali-2023-101730270442810.html
- JLL Naredco Research, Mumbai Residential Market, 2024
- Cushman and Wakefield Marketbeat Mumbai Office Q3CY24
- Knight Frank Research, Mumbai Property Review, 2023