An analysis of data for Maharashtra RERA project registrations, presents a positive picture for the residential real estate micro-markets across Mumbai, with 51% of the total carpet area that was registered, being sold
The total carpet area of projects registered under MahaRERA, as per recent data available, was 84.62 million sq ft, of which, the total sold area was 43.5 million sq ft – or 51 per cent. This is a very reassuring number, considering that the data encompasses a number of projects, whose completion timelines extend to 4-5 years from now. It indicates that developers have enough time to sell the stock, out of the 800 residential projects considered.<br
RERA registrations in Mumbai: Key takeaways
1. Thane shows maximum registrations, followed by the western suburbs: Region-wise analysis of the data shows that the maximum number of units registered are in Thane Municipal Corporation and Thane District (59,516 units registered). This is followed by the western suburbs, where 28,000 units are registered. The other regions include the central suburbs (16,852 units), south Mumbai (11,424 units) and the harbour region (7,502 units).
Andheri stood out in the western suburbs with over 7,500 registered units, Ghatkopar in the central suburbs with over 3,800 registrations and Chembur in the harbour region with over 5,000 registered units. Malad too has approximately 5,000 units registered under MahaRERA, while Goregaon has close to 4,200 units.
Proximity to the Goregaon-Malad New Business District and SBD Andheri, could be the reason for the high number of upcoming projects in Malad, Goregaon and Andheri. Chembur, of course, has been a preferred destination for the past few years, with its proximity to Bandra-Kurla Complex (BKC), which is now the de-facto CBD OF Mumbai.
2. Buyers across budget bandwidths are behaving similarly: The configuration-wise performance of RERA-registered projects for locations in Mumbai, shows that the unsold project performance for 1, 2 and 3-BHK flats, more or less mirrors the average unsold inventory in Mumbai.
The average unsold inventory is 49 per cent and the unsold inventory for 1-BHKs is 49 per cent, 2-BHKs is 50 per cent and 3-BHKs at 51 per cent. This means that buyers across different purchasing power categories, are displaying similar preferences. The sentiment and thus, decision-making for purchasing a house, does not vary as per affordability.
Key concerns for buyers and builders
1. The average timeline for completion of projects in key pockets has moved forward: In order to meet RERA guidelines, developers have revised their completion dates forward, in many cases by two years. To keep buyers interested, despite the delayed completion timelines, we are seeing a number of schemes by builders promising sops like zero GST and reduced stamp duty.
2. While buyers prefer close-to-completion projects, alignment of product to market demand is equally important: Projects with ill-suited designs are tough to sell, even if they mitigate construction delay risk. This is reflected in the data for projects to be completed in 2018. Thane Municipal Corporation and its adjacent areas are performing well as per the available data, with the least number of unsold units (15 per cent) for the projects to be ready by the end of calendar year 2017. However, the situation changes for 2018. For projects to be completed by EOY 2018, as per the data available, the unsold inventory in Thane is touching 35 per cent. The current data (as of July 31, 2017) shows unsold inventory in Andheri at 36 per cent in 2018, compared to 28 per cent in 2017. In Borivali, the unsold inventory is shown at 29 per cent in 2018, compared to 58 per cent in 2017. Chembur is showing unsold inventory at 30 per cent in 2018, compared with 69 per cent in 2017.
3. Understanding RERA data is important, yet challenging: The total number of units registered as of July 31, 2017, were 1,24,173. However, with a daily update, the number of units registered will go up. The details available for each project will be immense and consumers will be able understand a lot more about the project. They can, for instance, look at the date of launch, see the total projects sold and evaluate whether the project is selling well or not. However, all this involves a learning curve and a lot of patience. While analysing all this data to derive relevant pertinence will be a challenge, it will nevertheless be critical for well-informed decision making.
(The writer is CEO and country head, JLL India)