THE REALTY MARKET IN MUMBAI SEEMS TO BE GROWING UP OWING TO THE RISING DEMAND FOR AFFORDABLE HOUSING THIS FESTIVE SEASON

 

The real estate industry has undergone several changes over the last two years and all the amendments were directed towards the benefit of homebuyers. The implementation of RERA has made the industry buyer-friendly, hence motivating them to make the property purchase. At present, the realty market in Mumbai is witnessing the signs of recovery in the residential property, especially the affordable housing segment. The government’s Pradhan Mantri Awas Yojana (PMAY) scheme has encouraged many homebuyers to fulfill the dream of owning a property.

After the announcement of demonetisation, most buyers shirked to put their hard-earned money into real estate, and preferred to wait till the market streamlines. However, with the positive developments taking place in the industry, followed by the centre’s decision of approving 33 per cent increase in the carpet area of houses eligible for interest subsidy, under the affordable housing scheme, there is a sudden boost in the demand for newlylaunched one-BHK homes in Mumbai. “This decision is a huge step towards providing a boost to the construction sector which contributes to the increasing activity on the supply side. Lower home loan interest and necessary impetus given by the government to affordable housing is playing a key role in pushing the sales volume with the market seeing investments being done by actual end-users,” says Manju Yagnik, one of the leading developers.

 

>> FAVOURABLE TIME FOR END-USERS

According to experts, the city developers have witnessed a rise in demand for affordable housing as well as ready-to-move-in homes. The current real estate market in Mumbai is favourable for property buyers as the segment will offer good returns in the coming years.

Furthermore, the residential launches too have made a comeback. Mumbai residential market witnessed 128 per cent YoY growth in residential launches in the first half of 2018. This was primarily driven by dumping ground reprieve in Mumbai city and also mega project launches in peripheral suburbs. However, most developers have reduced the apartment sizes in the new constructed buildings. “Most developers focussed on reducing apartment sizes of their new launches. There is shrinkage of 12 per cent in apartment sizes across MMR, with some premium markets witnessing reduction of as high as 31 per cent,” informs Dr Samantak Das, chief economist and national director – research, of a leading property consultancy firm. He further adds, “The office market has been steady with rentals growing across business districts; however, the growth in transactions was restrained by lack of supply.”

The drop in price rates has also been successful in attracting homebuyers to consider property purchase. In addition to reduction in prices, developers are offering bouquet of sops including 24-month rent assurance, stamp duty waivers and no floor rise charges among others. However, according to the experts, the investor market has been little sluggish since the last year mainly due to rental policies, taxation and higher stamp duty.

>> ADVICE TO HOMEBUYERS

Buying a house is a long-term commitment, hence every individual needs to be careful before making any final decision. One should remember that the home-buying process should be smooth rather than a financial burden. “The key factor that young homebuyers should keep in mind is to evaluate their assets and liabilities to get the clarity on how much they can afford to spend on a house. This will make it easy for them to shortlist the options available in the market as per their choice of location, amenities, configuration and various other factors keeping budget in mind. In the process of exploring the properties, credibility of developer plays a major role in decision making,” explains Yagnik.

After in-depth home inspections, it is crucial to do a thorough research on mortgage options and down payment of home loan. Today, for buyers, it is possible to avail of a loan with the offer of zero down payments as well if credit score of a buyer is above par, but this convenience also comes with its own terms and conditions. “For first time homebuyers, having a good credit score are of utmost importance as this is one of the key factors taken into account by banks when they issue loans. Major mistake that ends up young homebuyers into trouble is negligence to factor the total cost of the property. Other major factor which every homebuyer should be aware of is to “know their rights”, introduction of RERA has created the legal groundwork to make the sector consumercentric by providing transparency and improve disclosures, and hence the end user has easy access to property-related data and information, creating a transparent interface,” concludes Yagnik.