MUMBAI: Weak residential property market scenario in Mumbai has not deterred real estate developers from launching new projects in the financial capital of the country. The city has witnessed launches of around 18,000 units in the first half of the year until June, representing an increase of 30% over last year, said a quarterly report by Cushman and Wakefield.
Of the total new launches, a majority of 30% were focused in the western suburbs of Andheri, Bandra, Malad and Goregaon. Navi Mumbai contributed 24% of the overall launches with the second phase of a large township project launched in Panvel. The central suburban stretch from Kurla to Mulund also contributed 20% of the new launches with two large projects launched in Mulund along with projects in Chembur, Kanjurmarg and Ghatkopar, the report said.
With a number of projects currently under construction in Thane, the pace of new launches has declined there in 2013.
According to Cushman & Wakefield, the prominent submarkets of South Mumbai, South Central and Western suburbs prime witnessed substantial increase in capital values in the range of 17-24% over the past year due to low availabilities of quality ready apartments. Most high-end and luxury projects at these locations are still under-construction, the report added.
The other submarkets like Central, Western Suburbs Thane and Navi Mumbai where launches were healthy witnessed capital values appreciate in the range of 3-6% for the mid and high-end segment due to increase input costs.
"The share of the high-end segments in new launches has increased substantially in spite of stagnant demand levels in the city. This is largely due to aspects like high land prices and development cost that developers have chosen to go for higher ticket size projects even while the demand is more for affordable and mid - end segments," said Shveta Jain, Executive Director, Residential Services, Cushman & Wakefield.
With demand remaining subdued due to high prices, developers have tried to reduce ticket size by offering smaller configurations especially in South Mumbai locations. This move has helped reduce ticket size by up to 20-25% and increase sales velocity. A few prominent developers have also delayed launches and are tweaking plans to offer lower priced units to boost sales, the report said.