Diversification is the first principle of sound financial investing. Be it bonds, mutual funds, fixed deposits, shares and even insurance-linked policies, investors juggle their allocations to cut down on risks and maximise the bumper crop of rewards. Of all the investment avenues, land remains an unfailing source of prosperity, a time-tested option that not only provides great appreciation but also a higher quality of lifestyle.
Now, the heartening part is that property analysts have predicted an uptick in India’s real estate sector, especially in the Mumbai Metropolitan Region (MMR) that’s worthy of being called the Golden Apple. Broadly, the MMR region comprises nine Municipal Corporations of Greater Mumbai, Kalyan-Dombivali, Panvel, Badlapur, Palghar, Bhiwandi, Ulhasnagar, Pen, Navi Mumbai, Thane, Mira Road-Bhayandar, Khopoli, Karjat, Matheran and Alibaug.
To understand why MMR is called a real estate goldmine, let’s do a bit of number crunching. It’s estimated that MMR’s real estate absorption — the number of units occupied in a market over a year — is around 32% which is more than 50% absorption in terms of value.
Between January and August 2021, housing sales across MMR have risen more than three times to ₹1.33 lakh crore, according to a joint report by CREDAI-MCHI and CRE Matrix. The report adds that housing sales in the MMR stood at 1,71,165 units, valuing ₹1,33,015 crore till August in this calendar year.
Not just that, MMR has the largest share in total land transactions between the third quarter of 2020 and November 2021 at 64%, according to data released by real estate consulting group, Anarock.
Bottomed-out prices, sops in the form of stamp-duty cuts and significantly low-interest rates were the principal reasons that encouraged the size of apartment upgrades in the MMR belt. With home loan interest rates now at a 10-year low and stamp duty reduced by 300 basis points (3%), a spike in property acquisition across the country is expected.
Unsurprisingly, MMR has distinguished itself with an impressive 8% year-on-year reduction in its unsold stock. And thanks to developer discounts and stamp-duty cuts, Mumbai’s south-central property micro markets could shed almost 10% of its total unsold inventory.
As of now, there’s a huge demand for uber-luxury housing too. Properties in this segment are priced anywhere from ₹10 crore to ₹30 crore and cover areas between 5,000 sq.ft. and 30,000 sq.ft.
Prime properties
A lot of celebrities, businessmen and numerous start-up entrepreneurs, who have enjoyed a sharp rise in their wealth in the last couple of years, have shown keen interest in buying these properties. A certain section of uber-rich buyers is directing capital gains from the stock market’s bull run to these high-end homes while others are cashing in on low mortgage rates.
Additionally, the Real Estate Regulatory Authority (RERA) Act, which came into existence in 2016, has influenced the market sentiment positively. Investors are confident of projects being delivered on time and with the promised quality. Not only has RERA added professionalism to the sector, but it has also boosted buyers’ confidence.
It must be mentioned here that the pandemic has played its part to bring about a slight shift in real-estate investors’ thinking. Stifled indoors, new-age buyers and HNIs are eager to explore green spaces and are getting increasingly drawn to lifestyle homes.
Upscale amenities
There’s a desperation to break away from restrictions and move towards large living spaces with upscale amenities. And luxury homes mushrooming in the MMR region offer precisely that: high-end comforts like personal gyms, panoramic view, library, private cinema screening rooms and attached gardens.
What furthers MMR’s allure are the numerous projects aimed at decongesting Mumbai. At the time of writing this piece, the Mumbai Metro is being tested. If the metro is going to be put to service by 2022, it will further reduce traffic snarls and boost real estate prospects in the city.
In general, infrastructure development has brought about better connectivity to the parent city, resulting in the intelligent home buyer’s keen interest to invest in properties in the peripheral areas.
Take, for instance, the Mumbai Trans Harbour Link, the longest sea bridge in India’s construction history connecting mainland Mumbai to Navi Mumbai, which will reduce the travel time from 2.5 hours to 15-20 minutes.
Satellite cities
It’s essential to note that these satellite cities are keeping pace with Mumbai in every aspect: water, electricity, drainage facilities and road connectivity.
There was a time when upscale areas such as Worli, Nepean Sea Road, Andheri and Bandra comprised Mumbai’s hot residential real estate markets. Now, with the MMR belt becoming a hive of luxury-home activities, Mumbai’s real estate horizons are rapidly expanding.
To this day, luxury, lifestyle and location remain Mumbai’s real estate drawcard. It probably explains why investors are reluctant to look elsewhere.
The writer is Director, Raiaskaran Group.
