5 reasons why Mumbai's real estate market is glittering this festive season....

The Mumbai real estate market saw 1.04 lakh property registrations in the first 10 months of 2023. October, which marked the start of the festive season with Navratri, reported 20 percent more property registrations than October 2022.

Here are?five reasons why the real estate market is sparkling this festive season.

Upgrades from smaller apartments

Post Covid, homebuyers across India have upgraded to bigger apartments, and the trend is no different in Mumbai, the country’s most expensive real estate market.

The ratio of 1 BHK units launched in 2023 went down to 29 percent, from 34 percent in 2019. For 2 BHKs the ratio stayed the same, 38 percent, while for 3 BHK apartments it went up to 15 percent in 2023 from 11 percent in 2019 (this total 83%. We need to say what comprises the rest). The launch ratio is the percentage of a particular type of configuration among the total units launched, according to the registration data of the Maharashtra Real Estate Regulatory Authority (Maha RERA).

The data possibly includes homebuyers residing in 1 BHKs upgrading to 2 BHKs, and 2 BHK apartment owners upgrading to 3 BHKs, real estate experts said.

"Till October, more than one lakh properties have been registered in Mumbai, and we may have around five percent more property registrations in calendar year 2023 compared to 2022. Upgrades is one of the ?reasons for property registrations increasing in Mumbai," said Virendra Joshi, senior vice president, research, at ANAROCK, a real estate consultancy firm.

Redevelopment picking up post Covid

The Maharashtra government had in January 2021 approved a 50 percent discount on premiums paid by real estate developers for several types of permissions. Owing to this, a lot of new project launches have been reported, and this has also resulted in the number of property registrations going up.

A real estate developer not wishing to be named said, "Out of the total number of properties being registered per month, around 20% is likely to be registrations of permanent alternate (sic) accommodation agreements (PAAAs). PAAAs are for homeowners going in for redevelopment of their old buildings in Mumbai.

Also read:?Mumbai real estate: Amid festive season, property registrations in October surge 21% to 10,244

In Q2FY23-24, the Mumbai real estate market reported a supply of 9,489 residential units.? The entire Mumbai Metropolitan Region (MMR) market saw a supply of 35,651 residential units. MMR includes areas like Thane, Kalyan, Dombivli, Navi Mumbai etc.

Unchanged home loan interest rates

The increase in property prices in the Mumbai real estate market, along with a significant 250 basis point (bps) rise in the repo rate during the last two years, had impacted property registrations in the affordable segment. "However, ?as home loan interest rates have remained unchanged in FY2023, there’s been a lot of optimism in the Mumbai market, in which the majority of the residential deals are in the price bracket of Rs 2.50 crore and ?below," said another real estate developer of Mumbai.

"Homebuyers are increasingly anticipating a stable interest rate environment. Such stability holds the potential to strengthen the housing market even further," Shishir Baijal, chairman and managing director, Knight Frank India, a real estate consultancy firm, had said on October 31.

Also read:?Mumbai real estate: 2BHK apartments gain traction post Covid; 1BHK owners upgrade to 2BHKs.

Increase in high value transactions.

According to the Knight Frank India report, there has been an upward trend in the registration of properties valued at Rs 1 crore or more. Their share of registrations has risen from 50 percent between January-October 2020, to approximately 56 percent in January-October 2023.

For example, the Hiranandani Group was able to book sales worth Rs 1,100 crore in just a week after launching three towers comprising 3- and 4BHK luxury apartments in Powai, a suburb of Mumbai. The units ranged between 1,100-1,600 square feet in area, and they were priced between Rs 6-10 crore, according to a company statement issued on October 16.

Festive season rush

October marked the start of the festive season with Navratri, and this year was significantly better for the Mumbai real estate market. Mumbai city reported registrations of 4,594 units during the nine days of Navratri (October 15-23, 2023,) up from the 3,343 units registered during last Navratri, a 37.4 percent YoY growth, per Maharashtra government data.