Higher demand in Mumbai for larger homes, price rise imminent
Higher demand in Mumbai for larger homes, According to a recent Knight Frank report, the Mumbai region witnessed property registrations jump to a 10-year high for July 2021.
The Covid-19 pandemic has affected both the health and economy of the country. There are some signs of revival with countries gradually introducing the vaccines to their populace. Businesses too have begun their deliberated and measured progress from risk management of the malady to the remedy of business recovery.
Consumers the world over are adapting to these situations by changing their behaviour. The Mumbai residential real estate market and the home buyers are no exception. Buoyed by the wholehearted acceptance and support of corporates of the success of the COVID-19 induced Work from Home (WFH) experiment, many of their employees who are looking to buy homes are showing some distinct trends of preferences in their buying behaviour.
The fact that the Mumbai residential market is on an uptick post the advent of COVID-19 is well borne by facts. According to a recent Knight Frank report, the Mumbai region witnessed property registrations jump to a10-year high for July 2021. With 9,037 units in July 2021, it is 15% growth over the previous month and up 239% compared to July 2020. These statistics incontrovertibly point out to the buoyant Mumbai home buyers’ confidence which is only going to increase as the trend goes.
Homebuyers are showing preference to bigger flats as is evident from Magicbricks PropIndex Report Q2., a quarterly research publication. This report shows that this increase in home sales in Mumbai was primarily of 2-3 BHKs which formed thebulk of 70% of the total sales during the Q2 period. The sale of 2-3 BHKs registered in this period was 10% higher on a QoQ increase and 18% more on a YoY basis. This points out a clear trend of demand for mid-size and larger homes by the current Mumbai home buyer. Initially, this trend was generally ascribed to the stamp duty exemption accorded by the Maharashtra Government. However, the fact that this direction has continued despite the State Government withdrawing the stamp duty concession points to its longevity and permanence.
What is even more interesting this gravitation of the Mumbai homebuyer towards bigger homes post Covid-19 is accompanied by increased demand for premium homes in the city. A report covering the first six months of 2021 by Square Yards, India’s largest integrated platform for Real Estate and Mortgages and one of the fastest-growing Proptech platforms in UAE, the rest of the Middle East, Australia, and Canada, reveals that the Mumbai luxury residential market saw transactions worth ₹4,000 crores in this period indicating an uptick in this segment for the first time in five years and 63% higher as compared to 2019 and 2020.
Both these phenomena of preference for larger and premium homes point to a changing mindset of the Mumbai homebuyers. This shift is partly fuelled and accelerated by COVID-19 as home buyers feel the need for the extra room for WFH. The demand for premium homes too was driven to an extent by WFH too, as people spend more time at home and hence the demand for greater amenities provided by premium homes.
Alongside the increased demand, there has been an overall reduction in the unsold inventory. As per a report by Anarock, the Mumbai Metropolitan Region saw 6% which was a maximum yearly decline in overall unsold inventory, in contrast to other cities. This trend is likely to continue given the surge in demand and is indicative of a price rise.
