Mumbai to See Demand Surpassing Supply in Next Five Years
According to experts, the city of Mumbai will see the demand for housing units enormously outstripping the supply in the next five years. According to Cushman & Wakefield, a global real estate consultant, Mumbai may expect an additional demand of approximately 2,25,000 units in the next 5 years while the supply is expected to be about 2,14,000 housing units. These numbers are in the middle and high end segments.
Mumbai is currently seeing and will continue to see a growth in the supply of housing units in 2014 and 2015. However, most of the supply will be in higher income segment. Though there are certain projects that are built for the middle income group, the prices of these housing units are more than what an average buyer is willing to pay.
While developers and other real estate players are trying to come up with different strategies to make their assets move in the middle-class segment, they have not been much successful owing to the sluggish economy and inflationary sentiments. The demand for “affordable” houses are still high.
Rentals stable in Mumbai for third quarter
The sluggish economy has shown its effects on the rental values of the apartments in Mumbai. Rental values have largely remained stable without much sign of increase across Mumbai for the previous quarter. There have been signs of marginal dip in locations of a central business district (CBD) or alternative business districts (ABD). These areas include areas such as Nariman Point, Cuffe Parade, Bandra-Kurla Complex, Kalina and Fort. The dip is seen owing to the shift in interests towards peripheral localities. The rental values have seen a decline of 2-3% in these areas compared to the previous quarter.
These areas have also seen a decline in absorption of commercial spaces. About 0.10 million sq.ft of commercial space was absorbed compared to 01.6 million sq.ft the previous quarter.
Areas in the peripheral region have seen a marginal increase in demand as well capital values. Lower Parel has seen a demand for large office spaces for corporate offices. Rental values for the IT segment is almost stable with a 6-7% appreciation in select commercial segments such as engineering, manufacturing and retail in the last quarter. This is mainly due to the limited availability of space. Thane and Navi Mumbai too have seen a marginal increase in absorption for commercial space.
