Mumbai, the country’s largest real estate market, is seeing a surge in demand for 2 and 3 bedroom apartments, up 70% of total demand for the quarter ended June, and is translating to an 18% gradual increase in demand for mid-size and large homes and an 18% on-year rise, Magicbricks PropIndex report is shown.
Accordingly, demand for small houses including 1 bedroom apartments Q2 saw a decline of 24% of total demand in 2021-down Q1 from 34% in 2021 and 37% in Q2 2020. Neighboring residential markets in Navi Mumbai and Thane also bounced back with the Mumbai Metropolitan Area (MMR) restoring its status as the most sought-after realty hotspot.
Various factors are driving this increased demand for big homes in Mumbai, including easy and affordable payment schemes offered by developers, an extension of 2% stamp duty benefit, availability of cheap home loans, and low margin money (down payment) requirement by banks.
Furthermore, these factors have also played a key role in limiting the decline in residential demand to just 16% QoQ compared to a decline in national demand for more than 23% QoQ. Government instructions to resume some construction activities with all security protocols during the lockdown period also helped prevent the fall in supply by just 6.6%.
Magicbricks research has also revealed that the western suburbs are priced between Rs 15,000-20,000 per sq ft in Andheri, Malad, Goregaon, Kandivli, and Dahisar, which remained buyers’ favorites during the quarter, which are responsible for major IT and commercial development with upcoming metro connectivity in these areas.
Thane saw a 1.4% rise in the prices of residential properties despite strengthening demand as well as supply during the quarter. The rise in prices is the fastest in all other sectors of the Mumbai Metropolitan Region (MMR) and is consistent with the nationwide trend. However, there is a notable shift in the preference of home buyers towards units under construction, which is primarily responsible for offering affordability and payment flexibility.
Navi Mumbai also saw an increase in demand due to cheaper rates and excellent connectivity. Despite restrictions on lockdown and construction-related activities, Navi Mumbai recorded a modest 0.7% rise in property prices during the quarter ended June 2021.
Moreover, as economic and construction activities resumed from mid-June, traction in the market is expected to rebound to normal levels leading to increasing residential supply and demand in the city.