A report by global property consultancy Cushman & Wakefield and real estate data analytics and workflow solutions firm Propstack, has pegged the total of number of under-construction residential units registered under MahaRERA, at 6,70,339 across 5,620 projects.
Of the total units registered, as many as 3,50,000 units remain unsold, leading to an inventory overhang of 52 per cent as of August 31, 2017. Configurations of one and two bedrooms were the most sold, which made up over 85 per cent of total sales. With over 50 per cent of the current residential inventory remaining unsold, the prices of projects have been largely stable, even as the momentum in launches of new projects has been slow in the Mumbai Metropolitan Region (MMR).
| Category | Total Stock | Unsold | Inventory Overhang | Sold Unit | Percentage sold |
| 1 BHK | 3,00,094 | 1,56,049 | 52% | 1,44,045 | 48 |
| 2 BHK | 2,87,450 | 1,52,349 | 53% | 1,35,102 | 47 |
| 3 BHK | 73,755 | 37,615 | 51% | 36,140 | 49 |
| >3 BHK | 9,040 | 4,701 | 52% | 4,339 | 48 |
| Total | 6,70,339 | 3,50,713 | 52% | 3,19,626 | 48 |
Source: data collated by Propstack and Cushman & Wakefield Research from MahaRERA.
See also: Affordable housing sees 27% growth in January-September 2017: Cushman & Wakefield
Maximum development concentrated in locations beyond Thane
The report analysed that projects in the MMR, registered with MahaRERA up to August 31, 2017, recorded a total of 5,620 projects including residential and residential-cum-commercial projects covering 506 million sq ft (msf) of development.
Areas beyond Thane (Dombivali, Karjat, Kalyan, Palghar, Mira Road, Virar, Badlapur, Bhiwandi, Ambernath and Shahpur) witnessed the maximum number of project launches and registrations in MahaRERA at 1,835 projects, constituting 33 per cent of total projects registered. Despite the distance from commercial hubs such as south Mumbai, central Mumbai and BKC, micro-markets beyond Thane have been throwing up viable residential options at multiple price points. The western suburbs, including the belt stretching from Bandra in the south to Borivali in the north, saw 1,400 projects making up 25 per cent of the total registrations. The eastern suburbs (18 per cent), Navi Mumbai (12 per cent), Thane (seven per cent) and south Mumbai (five per cent) completed the rest of the table.
“Availability of land at lower prices, is a crucial parameter that allows developers to keep the per unit prices under check. Most end-users are value sensitive and would like to get maximum benefits out of their purchases. Locations beyond Thane allow developers to create homes that deliver value beyond just habitat. These areas are well-connected through public transport, including suburban rail and roads and give developers the confidence to launch large-scale projects in these areas,” explains Gautam Saraf, managing director, Mumbai, Cushman & Wakefield.
End-users prefer smaller homes in Mumbai
Total units sold was estimated at 3,19,000. One and two-bedroom configurations had the highest share of sales, constituting 87 per cent. Sales of three-bedroom configurations made up 11 per cent, while even higher configurations were a mere one per cent of the total inventory sold. The end-users’ affinity towards smaller configurations, has been due to the high real estate prices in the MMR. Even while the capital values of affordable houses across most micro markets have not seen any drastic changes, when compared to other cities like Bengaluru, Delhi NCR and Pune, these are higher by at least 10-15 per cent for comparable projects and locations.
“As more and more projects register for MahaRERA, the market, including end-users, will have better access to information on developers and projects. For end-users, having all the information upfront will help them to assess the final product upon receipt. While MahaRERA has its judicial job cut out, having structured and authentic information on the development sector, will help in future planning and understanding as the cities of Maharashtra expand. The data will help us create better, sharper analysis of demand, as well as design future supply to help avoid demand-supply mismatches,” said Sandeep Reddy, director, Propstack, India.
Delivery timelines to improve, nearly 76 per cent of all ongoing projects to be completed by 2020
As many as 42 per cent of all projects registered under MahaRERA are heading towards timely completion. As many 2,300 ongoing projects have estimated on-time or before time completion, while another 2,300 projects (43 per cent) of total projects are expected to see delays of up to 36 months. 2018 is expected to see the largest volume of completion of under-construction projects at 1,454.
| Committed timelines from date of commencement and expected delays | Total Projects | Percentage of projects |
| Before Time Completion | 26 | 0.5 |
| On time Completion | 2,283 | 43 |
| 0-1 year | 940 | 17 |
| 1-2 years | 1,105 | 20 |
| 2-3 years | 331 | 6 |
| 3-5 years | 413 | 8 |
| >5 years | 324 | 6 |
Source: data collated by Propstack and Cushman & Wakefield Research from MahaRERA.
Traditionally, delays in projects from their committed timelines had become commonplace and buyers faced huge uncertainty on final delivery. However, with the MahaRERA norms coming in, a developer is now liable to make on-time delivery with a maximum provision of only 12 months’ delay. The developer would have to compensate the buyers appropriately, for any further delay.
“Maharashtra’s early adoption of the Real Estate (Regulation and Development) Act (RERA) will ensure that more projects get the requisite funding for completion, from domestic and international funds. While currently registered projects are still facing a backlog, these should ease out in the coming months through various funding options such as structured debts, JVs, equity investments and sales. We also expect the scheduled retail banks to make greater participation, after the RBI’s relaxation on possible exposure that banks can have to real estate. Further, we expect the end-user purchase activities to start picking up in the next few months, as RERA gives buyers a safety net for their investment. Thus, with improving sales momentum and better project management processes in place, we expect investors to show greater confidence towards the sector and increase their fund allocation to residential real estate,” adds Saraf.
Housing News Desk is the news desk of leading online real estate portal, Housing.com. Housing News Desk focuses on a variety of topics such as real estate laws, taxes, current news, property trends, home loans, rentals, décor, green homes, home improvement, etc. The main objective of the news desk, is to cover the real estate sector from the perspective of providing information that is useful to the end-user.
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