Knight Frank India recently launched its Residential & Office research report on the Mumbai realty market. The report focuses on how the Mumbai real estate market has fared in the wake of a sluggish economy.
Owing to weakening demand, new launches in the city plummet over 40% compared to peak levels in 2010 as developers shift focus on liquidating current inventories. Mumbai unsold inventory level is almost 44% in comparison to NCR which stands at 26% even with twice the number of units under construction. Absorption levels for the January-September 2013 period have dropped to approximately 39,000 units which is a 26% drop and more than 43% off the 2010 highs. In a bid to liquidate their higher priced inventory, developers in the premium segment have been open to reducing prices upto a maximum of 25% in favour of a sizeable up-front payment.
Mumbai’s office market holds steady despite an uninspiring economic environment. First nine months of 2013 have seen absorption levels marginally exceed those during the same period in 2012. In the coming months, the BFSI sector will stake claim of a bigger slice of the transaction pie once new banking licenses are granted by early next year. Upcoming infrastructure projects like the metro rail network will attract corporates in certain in-fill areas like the Andheri-Kurla road.