Mumbai: The realty sector in the Mumbai Metropolitan Region (MMR) took a big hit last year. It suffered a 43% drop in the launch of residential projects and a 9% drop in sales.
A new report, however, remained optimistic when it revealed the sector will recover from its slump because of the new government’s emphasis on manufacturing and the service industry.
According to the report titled ‘India Real Estate Outlook’, launched by realty consultancy firm Knight Frank, builders are taking a cautious approach when it comes to new launches.
In 2014, the number of launches in the MMR totaled just 62,345 housing units, a significant drop from the 1.09 lakh units launched in 2013. Even sales fell marginally to 67,700 units in 2014 from 74,000 units in the previous year.
According to Samantak Das, chief economist and director, research, Knight Frank India, sentiments played a major role in the decline. “Dampened sentiments played a major role in the slowdown,” said Das.
Peripheral central suburbs such as Dombivli, Kalyan, Mumbra and Ambernath, eastern suburbs from Sion-Mulund along with Navi Mumbai accounted for more than half of the MMR’s under-construction activity. However, the peripheral suburbs accounted for more than half the sales. “Affordability along with increased connectivity with major employment hubs played a major role in the sales,” said Das.
Builders agreed projects in the outskirts are now selling well. According to Sachin Deodhar, president, sales and marketing, Rustomjee, who have mega projects both at Thane and Virar, people are migrating to the outskirts because of both affordability and a better quality of life. “The outskirts are providing bigger houses at affordable rates,” said Deodhar.
The report said things will get better for the realty sector in the next six months because the BJP-led government’s thrust on the manufacturing and service industry will have a cascading effect. “This will usher in a positive sentiment, which will help drive sales in the realty sector,” said Das. The report said realty prices will stabilise during this period.