MUMBAI: Housing market in Mumbai Metropolitan Region has recorded worst half-yearly performance since global financial crisis in 2008 with around 2 lakh unsold homes and weakening sales, showed a report released by Knight Frank India for the period ending June.
According to the report, last 30 months have seen a continuous fall in launches and sales across Mumbai, National Capital Region, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. Residential property market across the country is still reeling under tremendous pressure and no recovery is visible in the coming 6 months.
In Mumbai, the most expensive property market in the country, saw 47% drop in new housing project launches during the first half of the year. Over the last two years, demand has slipped 30%, while launches have plummeted nearly 70%. Luxury residential market with price tag of over Rs 5 crore per apartment has also run into rough weather and has not seen any new launch in the last six months.
However, Knight Frank claimed that residential market in central Mumbai and central suburbs have seen good growth from a year ago. In MMR, builders have been foraying into locations beyond Thane for affordable housing projects. Around 59% of new launches with price tag below Rs 25 lakh are in locations like Kalwa, Kalyan, Dombivali and Ambarnath. Locations like Mulund, Kanjurmarg and Chembur have seen big launches contributing 28% of new launches in these six months.
The report also added that commercial property across the country has turned around driven by office space pick up by companies in IT/ITeS, banking and financial services sectors.
"Going forward, we expect Mumbai to clock office transactions of 7.7 million sq ft during 2015. Residential market on the other hand is still reeling under tremendous pressure with drastic drop in new launches at the back of falling demand. The recovery of the residential market does not seem eminent until 2015 and we expect sales to be in the range of 63, 000 units which is marginally below the 2014 levels," Dr. Samantak Das, Chief Economist & National Director - Research, Knight Frank India.
Mumbai, the country's commercial capital, has recorded office space transactions of 2.5 million sq ft during the six months ending June. Banks, manufacturing and media consulting continues being the anchor for Mumbai Metropolitan Region's office market, the report added.
"Mumbai developers have begun showing interest towards commercial developments which was not the case in the last 2-3 years... Going forward, I expect absorption to clock 5.8 million sq ft - an increase of 20% compared to H2 2014," said Viral Desai, National Director, Office Transactions, Knight Frank India.
In recent months, e-commerce players such as Flipkart, Amazon and Snapdeal have inked office space deals upwards of a million sq ft each, resulting in an unprecedented upsurge in transaction activity in the office market. Ends
According to the poll, in inflation-adjusted terms, property prices have appreciated, particularly rapidly, in Hong Kong, India, Malaysia and Singapore since 2008-09 global financial crisis that was triggered by the housing sector.
Respondents were split when asked whether they expect meaningful reform of corporate governance of the PSU banks over the next three years.
"There was 60:40 split between respondents expecting improvements in Indian banks' asset quality in the financial year ending March 2016 and those who saw a stable trend," the poll said.
The poll was conducted real time on a combined audience of around 230 professionals from Hong Kong and Singapore.