MUMBAI: The year 2013 was an eventful year for the Indian Real Estate sector with the introduction of the Real Estate Regulatory Bill and the Land Acquisition Bill in the parliament. With such developments happening, there is high optimism about the coming year – 2014. There is hope that 2014 will see a positive shift from the earlier years and will bring in the much required stability and transparency in the property market. Mumbai’s real estate market too, expects to see stability and healthy trends in 2014.
With the BMC sanctioning plans almost after two years, there has been a huge relief to the long pending projects, which will finally be launched now. As a result, the city’s performance is expected to pick up considerable pace in the coming year. Now that the government has finally recognised and realised the woes of this cyclical industry, their small steps are also providing a big boost to the business. With several new launches hitting the market in 2014, the customer sentiments are expected to improve, giving the market a new face altogether. The second half of 2014 is expected to witness a rise in property prices due to rising cost of materials, labour and cost of funding.
Mumbai market has been a fragmented one due to it being a low island city. As a result, the micro-markets behave very differently from each other. For instance, as we go away from the city, there is a large demand for 2 to 3BHK units, while within the city, 4 to 5BHK luxury apartments costing between Rs 1-5 crore are most sought after. In terms of supply, Mumbai has seen a steady supply of high-endproperties but there has been a very low-key interest in the mid segment category.
There is a huge demand for mass housing or affordable houses in Mumbai, but currently, it cannot be met due to high land prices. For this reason, the city needs to meet this gap with solutions such as rental housing and subsidised homes. Buyers are hoping for all-round reforms from the government, especially administrative, land, fiscal, tax and banking reforms that will boost growth and help in reduction of prices.
However, in spite of a huge demand for housing in the mid and affordable segment category, the government has not been doing enough to make it financially viable for developers to undertake such projects where the demand is phenomenal. While there are several speculations over what the government may do to boost the market, there is still a lot to look forward to in the coming year.