Mumbai Could Witness Glut in Housing Supply in Coming Months
Mumbai and its suburbs could see a glut in housing supply in the coming months due to a plethora of new launches by property developers. Already, at 28,000 units, Mumbai Metorpolitan Region (MMR) saw the highest number of launches among the top eight cities in the fourth quarter of FY23. It was followed by Pune with 19,000 units and Hyderabad at 16,000 units, according to real estate analytics and research firm Liases Foras. “Unsold stock level is at the peak in MMR. In Q4FY23 it has gone up by 29% to 377000 units,” said Pankaj Kapoor, Chief Executive at Liases Foras. Kapoor said supply is not going to reduce in the next one or two years and as a result, prices are not expected to go up much. Prices rose 12% in NCR in Q4 and 10% in Hyderabad, while in Mumbai the change was -1 %. Bengaluru-based developer Prestige Estates Projects recently entered into an agreement to execute an over 1 million sq ft society redevelopment project with nearly Rs 6,000 crore revenue potential in Mumbai’s Worli area, and plans to launch the project in September. Mahindra Lifespace Developers bagged a redevelopment project with a revenue potential of Rs 850 crore, the company said last week. According to Motilal Oswal Research, demand momentum has sustained despite supply inching up in a few markets like MMR. “Supplies for the top-8 cities have exceeded absorption since the last two quarters driven by increased launches in MMR, Pune and Hyderabad. That said, inventory overhang for the industry has sustained at a comfortable range of 18 months, which is conducive for consistent price hikes,” Motilal Oswal Research said. The brokerage expects coverage to pick up from Q4 and reach a multi-quarter high of 18 million sq ft. According to Anarock Property Consultants, in 2022, MMR added around 125,000 residential units, almost in line with 134,000 units added during the previous peak of 2014. In terms of share, Mumbai Island city and the suburbs together accounted for 73% of new launches in 2022, while Thane and Navi Mumbai accounted for 16% and 11%, respectively. “A quick look at the Q1FY23 numbers indicate that already during the quarter 30% of full-year 2022 supply has been added in the city. As a result, we believe that 2023 new launches in MMR might be in line with the 2022 numbers or even a notch higher,” said Anuj Puri, chairman of Anarock Property Consultants.
Tags : Mumbai suburbs housing supply property developers MMR