MUMBAI: Mumbai remains the most unaffordable market with 29% of the city’s total under construction units surpassing the Rs 10 million mark as compared to 11% and 5% for the NCR and Bengaluru markets respectively, said a Knight Frank research report released on July 1. Bengaluru remains the most affordable residential market with more than 77% of its total under construction units falling below the ticket size of Rs 5 million. This is followed by Chennai at 75%.
“The deliberate strategy on the part of the developers in these cities to focus on the peripheral areas with the right size of apartment area has ensured that the new supply does not breach the affordability level of the target segment. In contrast to this, Hyderabad has only 51% of its total under construction units below the Rs 5 million. ticket size despite the city having the lowest weighted average price among the top six cities,” it said.
Since majority of the new projects are skewed towards larger sized apartments, the ticket size breaches the Rs 5 million mark despite the lower per sq.ft. price. In Mumbai, only 48% of the city’s under construction units are below the Rs 5 million mark, which is the lowest among the top six cities. The report said incessant price rise and higher concentration of premium projects in Mumbai with a ticket size of more than Rs 10 million in new launches have limited the purchasing ability of home buyers resulting in a decelerating rate of absorption over the previous four quarters. Furthermore, large number of new launches in the previous four quarters has significantly increased the unsold inventory in the market, it said.
“Peripheral locations like Vasai, Virar, Mira Road, Ghodbunder Road and Panvel witnessed a slew of new launches during the last one year. However, despite the waning interest of home buyers, quoted prices in Mumbai continue to remain high as developers are increasingly offloading their unsold inventory at a discount to investors who are willing to make substantial upfront payment,” said the report.