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Mumbai Metropolitan Region saw 28% dip in sale of homes in 2015-2019: Data
Hindustan Times  |  February 11, 2020

Mehul R Thakkar Mumbai

The real estate sector, which has been facing a slowdown in recent years, witnessed a slump in the sale of houses by 28% in the Mumbai Metropolitan Region (MMR) between 2015 and 2019, as compared to the sales between 2010 and 2014, revealed the data by real estate consultancy firm Knight Frank India.


Between 2015 and 2019, the sale of houses declined to 3.10 lakh, from 4.32 lakh in the previous five years. In Mumbai alone, the sale of houses went down by 16% between 2015 and 2019.


According to the data, the number of residential project launches in MMR, too, witnessed a decline in the past five years by 54% as compared to the previous five years, with Mumbai alone seeing a 29% decline. As per the data, around 5.46 lakh housing units were launched in MMR between 2010 and 2014, which came down to a mere 2.51 lakh units between 2015 and 2019.


“The housing sector in MMR witnessed a healthy momentum in terms of home sales and launches during the 2010-14 period. We can say that it was one of the best periods for the sector, during which residential prices were on an uphill and the demand was buoyant. However, the industry started slowing down between 2015 and 2019. Most residential markets saw a moderate price appreciation during this period and moved into the trajectory of correction in 2018 and 2019,” said Shishir Baijal, managing director, Knight Frank India.


In the city, south Mumbai and western suburbs were the worst-hit in the slowdown. During the 2010-2014 period, around 2,649 housing units were launched in south Mumbai, which went down to 1,950 units between 2015 and 2019. The sale of housing units in south Mumbai also ped to half (1,687) between 2015 and 2019, as compared to around 2,604 units sold during 2010-2014.


In the western suburbs, merely 34,769 housing units were launched in the past five years, as compared to the 63,770 housing units launched between 2010 and 2014. The sales also came down by 25% between 2015 and 2019. In the central suburbs, the decline in sales and launches was marginal, the data said.


Realty experts said the decline in launches of residential units began in 2013, and in 2015, the number went down substantially. Two years later, the sales and launches remained sluggish, most likely owing to demonetisation in November 2016.


In the case of the affordable segment &ndash housing units below Rs 50 lakh &ndash the data indicates that the launches rose marginally in 2019 from 2018, but the sales of the houses went down last year as compared to 2018.


According to Baijal, the sector may not see any signs of improvement this year either. “Developers started taking cognisance of the build-up in the unsold inventory since 2010, and from 2015 onwards, began curtailing the number of launches to maintain the demand-supply equilibrium. However, at the same time, demand also started to slow down. The industry is going through a difficult period, and it might take another two-three years for any meaningful recovery to show on ground,” he said.


The unsold inventory in MMR stood at 1.45 lakh units in 2019 &ndash a surge from 2018, 2017 and 2016. However, it is less than the number of units that went unsold in 2015, 2014 and 2013.


Shivnath Marwah, a Mira Road resident, who is looking to buy a house in MMR, said, “I stay in a rented apartment in Mira Road, and have been contemplating to buy a house for the past three years now. But somehow there is no confidence in the overall market scenario for me to take the risk of buying a house by taking a home loan. Once the monthly instalment starts, I would have to make the payments for the next 15 years. But the annual increase of income is not substantial for me to take such risks.”


Acknowledging the decline in sales, state housing minister Jitendra Awhad said that the government will take steps to improve the sales in private real estate sector. “I’m coordinating with those from the real estate sector to bring positive sentiments in the sector. As far as government land such as Mhada [Maharashtra Housing and Area Development Authority], is concerned, we don’t have any issues pertaining to the sales or demand. The demand for every unit of Mhada is above 100.”