Mumbai’s ‘recession proof’ south witnesses a downturn
While the overall real estate market in the city has been tepid over the past few years, marked by a high inventory pile-up due to increased supply and subdued demand, the inventory pile-up in south Mumbai appears to be the most worrying
Oct 11, 2014
Source : The New Indian Express
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With Mumbai’s real estate sector activity shifting northwards, a trend that is amply reflected in the surge in prices in that part of India’s business capital, south Mumbai’s billing as the country’s costliest real estate hub seems to be under threat. While the overall real estate market in the city has been tepid over the past few years, marked by a high inventory pile-up due to increased supply and subdued demand, the inventory pile-up in south Mumbai appears to be the most worrying.

“The inventory pile-up in south Mumbai is high not in terms of the quantum of inventory, but in terms of the quarters-to-sell ratio, which refers to the number of quarters it will take to clear the unsold stock. South Mumbai consumers are very informed. They are generally the first ones to pull out in times of a slowdown and also the first to be flamboyant when there is a recovery. The reason for the low velocity of sales is the overall sluggishness in the market,” said Samantak Das, chief economist and director of research at Knight Frank India.

According to data from real estate consultancy firm Knight Frank, the inventory level in the south Mumbai market as of June 2014 will take about 18 quarters, equivalent to 4.5 years, to sell, compared with an average period of three years for the unsold inventory for the entire Mumbai Metropolitan Region to clear.

- See more at: http://indianexpress.com/article/business/business-others/mumbais-recession-proof-south-witnesses-a-downturn/#sthash.DmEa90gw.dpuf

With Mumbai’s real estate sector activity shifting northwards, a trend that is amply reflected in the surge in prices in that part of India’s business capital, south Mumbai’s billing as the country’s costliest real estate hub seems to be under threat. While the overall real estate market in the city has been tepid over the past few years, marked by a high inventory pile-up due to increased supply and subdued demand, the inventory pile-up in south Mumbai appears to be the most worrying.

“The inventory pile-up in south Mumbai is high not in terms of the quantum of inventory, but in terms of the quarters-to-sell ratio, which refers to the number of quarters it will take to clear the unsold stock. South Mumbai consumers are very informed. They are generally the first ones to pull out in times of a slowdown and also the first to be flamboyant when there is a recovery. The reason for the low velocity of sales is the overall sluggishness in the market,” said Samantak Das, chief economist and director of research at Knight Frank India.

According to data from real estate consultancy firm Knight Frank, the inventory level in the south Mumbai market as of June 2014 will take about 18 quarters, equivalent to 4.5 years, to sell, compared with an average period of three years for the unsold inventory for the entire Mumbai Metropolitan Region to clear.

- See more at: http://indianexpress.com/article/business/business-others/mumbais-recession-proof-south-witnesses-a-downturn/#sthash.DmEa90gw.dpuf

With Mumbai’s real estate sector activity shifting northwards, a trend that is amply reflected in the surge in prices in that part of India’s business capital, south Mumbai’s billing as the country’s costliest real estate hub seems to be under threat. While the overall real estate market in the city has been tepid over the past few years, marked by a high inventory pile-up due to increased supply and subdued demand, the inventory pile-up in south Mumbai appears to be the most worrying.

“The inventory pile-up in south Mumbai is high not in terms of the quantum of inventory, but in terms of the quarters-to-sell ratio, which refers to the number of quarters it will take to clear the unsold stock. South Mumbai consumers are very informed. They are generally the first ones to pull out in times of a slowdown and also the first to be flamboyant when there is a recovery. The reason for the low velocity of sales is the overall sluggishness in the market,” said Samantak Das, chief economist and director of research at Knight Frank India.

According to data from real estate consultancy firm Knight Frank, the inventory level in the south Mumbai market as of June 2014 will take about 18 quarters, equivalent to 4.5 years, to sell, compared with an average period of three years for the unsold inventory for the entire Mumbai Metropolitan Region to clear.

- See more at: http://indianexpress.com/article/business/business-others/mumbais-recession-proof-south-witnesses-a-downturn/#sthash.DmEa90gw.dpuf

 

Mumbai: With Mumbai’s real estate sector activity shifting northwards, a trend that is amply reflected in the surge in prices in that part of India’s business capital, south Mumbai’s billing as the country’s costliest real estate hub seems to be under threat. While the overall real estate market in the city has been tepid over the past few years, marked by a high inventory pile-up due to increased supply and subdued demand, the inventory pile-up in south Mumbai appears to be the most worrying.

“The inventory pile-up in south Mumbai is high not in terms of the quantum of inventory, but in terms of the quarters-to-sell ratio, which refers to the number of quarters it will take to clear the unsold stock. South Mumbai consumers are very informed. They are generally the first ones to pull out in times of a slowdown and also the first to be flamboyant when there is a recovery. The reason for the low velocity of sales is the overall sluggishness in the market,” said Samantak Das, chief economist and director of research at Knight Frank India.

According to data from real estate consultancy firm Knight Frank, the inventory level in the south Mumbai market as of June 2014 will take about 18 quarters, equivalent to 4.5 years, to sell, compared with an average period of three years for the unsold inventory for the entire Mumbai Metropolitan Region to clear.

Data from the consultancy firm further shows that the age of the inventory in south Mumbai, comprising areas such as Malabar Hill, Napean Sea Road, Walkeshwar, Altamount Road, Colaba and Cuffe Parade, is also the longest, with houses there lying unsold for 15 quarters on an average. The high stock of unsold houses is despite the fact that new launches in south Mumbai areas have been very limited due to scarcity of land. Of all the new projects launched in Mumbai over the past two years, less than one per cent of them have been in south Mumbai.

Pankaj Kapoor, managing director at Liases Foras, a Mumbai-based real estate research firm, said, “All the projects in south Mumbai are falling in the ultra luxury segment so the prices are extravagant. Affordability is a factor that is denting sales across Mumbai. For south Mumbai residents, price has not been a major factor, but the rise in residential property prices in south Mumbai over the past decade has been massive and there is not much demand at the price.

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