The residential real estate market in Mumbai and the Mumbai Metropolitan Region (MMR ) has shown strong demand, of late. The second quarter of 2022 saw as many as 20,000-plus new residential units being launched across the region.
Mumbai alone saw a quarterly rise of 5 per cent in terms of new launches, indicating a positive upward trajectory for demand of new units in the bustling metropolis.
Zone-wise, the Central Suburbs dominated the supply of new residential units, followed by the Western Suburbs. Interestingly, in spite of several headwinds, including, among others, the raising of stamp duty, imposition of metro cess, as well as the rise in lending rates in Q2 FY 2022, Mumbai still showed a growing demand for supply of new residential units.
The demand for 1BHK units and ‘above 4BHK’ units exceeded the supply – 60 per cent against 53 per cent, and 3 per cent against 1 per cent, respectively. The demand for 2BHK, 3BHK, and 4 BHK units was lesser than the supply (29, 7, and 1 per cent against 34, 10, and 2 per cent, respectively).
That said, overall, the demand for larger units seems to have taken a backseat. Units designated as 3BHK and above comprised only 13 per cent share of the total online searches.
In comparison, the demand for smaller units (1 BHK and 2 BHK) witnessed a significant growth similar to that seen in the previous quarter. Their demand stood at 60 per cent and 29 per cent, respectively. This skewness in demand for smaller configurations, though always prominent in the MMR market, once again seems to have returned to the mainstream after two consecutive quarters (Q4 2021 and Q1 2022).
Overall, the supply was also in sync with the demand trends, with 1BHK units registering 53 per cent share of the inventory, followed by 2BHK residential units at 34 per cent.
As for the ticket size, as revealed by the Square Yards’ online search trends, properties worth less than Rs. 30 lakh saw an overall decline as compared to Q1 2022. On the other hand, the demand share of the residential units in the Rs. 60 lakh to Rs. 1 crore bracket stood at 39 per cent, which could be attributed to the buyers’ preferences for more affluent homes. Apparently, more buyers are now eyeing real estate as an investment hedge against inflation, and the demand for premium properties is expected to see a spurt in the long run.
Developers in the MMR region too seem to have taken cognisance of this fact. About 43 per cent of the total inventory comprises residential units worth Rs 1 crore and above.
As to the type of property, buyers in the Island City still preferred apartments over other types of dwellings. The demand and supply for apartments stood at 79 per cent and 98 per cent, respectively. There is still a demand for independent houses, plots and villas, though the supply is highly skewed. Builder floors seem to have completely fallen out of flavour with buyers.
