Mumbai real estate project launches down 36%, hit by RERA

The new discipline brought about by the coming into force of the Real Estate Regulatory Act (RERA) and the Bombay High Court's stay on unchecked construction have combined to push down new real estate project launches in the Mumbai Metropolitan Region by up to 36 per cent in the January-June 2017 period, says a Knight Frank India report.

The India Real Estate (January to June 2017), launched on Wednesday said RERA compliance deterred builders from marketing their projects, while buyers accustomed to the old ways of financing purchases too found it difficult to comply with transparency requirements.

While the first half of 2016 saw 24,450 flats launched, the first half of 2017 witnessed a 15,763 units entering the market.

While sales dropped by 8 per cent compared to last year, the ratio of units launched with a price range below Rs75 lakh increased from 56 per cent during the first half of 2016, to 84 per cent in the first half of 2017. "A significant chunk of new launches took place below Rs50 lakh," it said.

"Launches have been hit more than sales. Developers are giving priority to completion of projects and becoming RERA compliant, which eventually will augur extremely well for the industry. Sales were 8 per cent lower than the same period last year due to demonetisation,'' Samantak Das, chief economist and national director, research, Knight Frank, said.

''On the price front, Mumbai, like other cities, is undergoing a time correction. Going forward, since Maharashtra is one of the frontrunners in having a RERA regulator in place; we believe that this city may come out of the hiccups of policy interventions soon," he added.

The report said smaller apartments and lower prices have led to a growth in the share of launches in the central suburbs while Vasai-Virar and Mira-Bhayandar received the lion's share in the western suburbs. "The unsold inventory of 1,38,652 units remains a concern. Developers will take over two years to exhaust stock. Developers are pushing to offload unsold inventory, which has triggered steady sales in Kalyan-Dombivli," it said.

The peripheral central suburbs of Mumbai had the largest number of unsold flats (31,758) while the number for peripheral western suburbs stood at 22,126.

Meanwhile in the top eight cities of the country, new launches crashed by 41 per cent. Sales too were down 11 per cent year-on-year, which is the lowest first half sales in the last five years, said the Knight Frank report.

While the first half of 2016 witnessed sales of 1,35,000 apartments, the figure dropped to 1,20,755 between January and June, 2017. The total unsold inventory in the first half of 2017 in Mumbai, NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad is 596,044, a 17 per cent drop from the peak of the second half of 2014.