Home buyers had it good in 2018 with prices in Mumbai dropping by 7% as compared to 2017 with builders cutting prices to clear their unsold inventory.
“The average price of units in 2018 saw a reduction of 6.8% year on year, making the market more affordable. The Mumbai Affordability Index level dropped nearly 400 bps (basis points), according to the Knight Frank Affordability Index,” Knight Frank India said in a report.
The index indicates that the house price to household income ratio in Mumbai has reduced from 11 points in 2010 to 7.2 in 2018, it said in the half-yearly report.
“Mumbai has seen a significant drop of 7% in average prices in 2018, which coupled with reduced sizes of new launches, has brought down the average ticket size in the city,” Shishir Baijal, Chairman and Managing Director, Knight Frank India said. “Consequently, home buyers are getting a better value for their purchase than a few years ago.”
Knight Frank said with this correction in prices, sales rose 6% in the residential market as compared to all of 2017, with 182,207 homes being sold.
Mumbai saw total new unit launches of 74,363 units in the full year 2018, registering a growth of 220% year on year over a low base in 2017. Most of the new launches took place in the second half of 2018.
As per the report, a significant shift of strategy was seen within new launches. “Compact homes are becoming pervasive. Developers chose to reduce the average size of apartments in order to make the overall ticket size affordable. Mumbai Metropolitan Region region saw a decline of approximately 25% in the sizes of new launches in 2018 as compared to five years ago,” the report said.
In commercial office space, leasing activity was recorded at 5.1 m sq ft in the second half of 2018, registering a growth of 14% year on year over same period last year. Full year 2018 saw leasing activities to the tune of 7.9 m sq ft, showing a growth of 5.4% over last year.
