Can South-Central Mumbai Handle Its Luxury Oversupply?
· It has a total unsold inventory of approx. 11,000 units as on Q1 2019
· Substantial unsold stock is of large-sized properties with lower demand
· Multiple options have increased the gestation cycle for luxury projects sales
· Ticket sizes in south-central Mumbai go to over INR 80 crore; INR 15 crore in other tony areas
Anuj Puri, Chairman – ANAROCK Property Consultants
Luxury housing in South-central Mumbai is rarely out of the news.
Mumbai's legendary playing ground of Bollywood celebrities and high-flying business tycoons has been a constant magnet for HNIs and UHNIs from both within the city and beyond, and everyone from start-up founders to C-Suite professionals has an inherent yen to live here.
While the demand for luxury homes in South-central Mumbai is beyond dispute and its real estate landscape has certainly evolved over the last decade, the availability of land parcels in some of its micro markets has led to large-scale development of luxury homes and commercial spaces.
This trend is likely to persist in the coming years and we will see more real estate development replacing old structures and buildings. As of today, micro markets in south-central Mumbai have emerged home to some of the biggest and most prestigious luxury housing projects in the city.
Micro markets such as Worli, Prabhadevi, Mahalaxmi, Tardeo and Lower Parel, among others in south-central Mumbai are considered the new luxury housing destinations for industrialists, business honchos, sports personalities and celebrities.
Due to the high aspirational value of a home in these areas, buyers pay considerable premiums on properties here - both on account of the snob value and the lifestyle amenities provided by developments in this micro market.
However, developers may have been a little too enthusiastic in unleashing supply to cater to this nouveau-riche demand.
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5 年Anuj Puri Indeed. There has been too much of oversupply and can predict that demand has also slowly just begun to pick up and will be steady because of the snob value and lifestyle amenities when compared to suburbs. But developers have again started dreaming of astronomical valuations and hence might be a major mismatch. To reduce the cost of maintenance on the ready inventory, developers must think of hacks like co-living operators who would atleast make the place habitable and appreciate the property value. I'm however very much interested to understand that does the math work for developers to get into a long-span lock-in period with the operators ?
Senior Advisor @ BDA Partners | MBA
5 年Sir, is there some way to short the market?
Chief Operations Officer with 25+ years of diversified experience for managing E&C, RE, infrastructure, large devpt.5
5 年Sorry to say, might be not.