Mumbai is witness to an incredibly complex real estate market, being active and dynamic to the point that by the time one grasps a trend, it has already evolved to the next level. The sector has undergone steady transformation while moving towards more streamlined and transparent functioning, especially due to the consolidation of smaller players coming together alongside larger players.
This fiscal year commenced with renewed socio-economic objectives, spearheaded by the government in an attempt to improve market conditions’, the real estate industry has demonstrated its readiness to take up the challenge.
2016 proved to be a landmark year with demonetisation taking centre stage thereby bringing in consolidation in the sector. It not only changed the way consumers engage with developers today, but also demonstrated its strengths in bringing more transparency in transactions.
As buyers become more aware, and have access to real-time information, there has been a definite shift in lowered information asymmetry. This shift has made buyers more confident in the investments they make in the sector leading to the industry becoming more streamlined and organised.
Alongside demonetisation, GST, RERA, and REITS have all made waves in 2017. Post their implementation, the industry has moved beyond the stereotype of it being an area of malpractice and at par with its counterparts in the developed world with more streamlined processes and faster turnaround times. It has also brought in transparency into the system. The hub of real estate, Mumbai saw land parcels being priced better through these regulations.
The budget 2017 -18 also gave the industry the added impetus to resolve liquidity issues that the industry has been facing, in addition to coming as a breather to those holding inventory. GST, especially, lowered the tax burden potentially resulting in lowered construction costs.
The industry is not the same as before, and neither are its customers. Buyers today have a multitude of options to choose from before purchasing a land or buying a house. It is not only imperative that we differentiate, but also enjoy a level of trust to become successful, with initiatives that assure buyers of our commitment towards them. Government initiatives such as RERA & REITS ensure customers peace of mind, and invests them in the project on a more personal level.
Move to the Suburbs
Mumbai continues to grow, and the city is a micro-market in itself. A major change we have seen in the industry is the shift in area preferences among buyers. While South Mumbai still holds its charm, more and more buyers, especially homebuyers, are moving north and we are seeing preference for suburbs such as Mulund or Thane.
As demand increases and square centimeters decrease, for the first time these suburbs have become a viable option. Infrastructure, once a chronic pain point in these areas, has also significantly improved. The growth of the real estate market directly corresponds with the improvement in infrastructure and these developments have brought outlying areas into the fold.
For buyers, it also helps that these destinations offer options catering to all segments and budgets, without cutting back on amenities. Developers have to factor in aspects such as scale and profitability while bearing in mind the needs and aspirations of the consumer.
As measures in get augmented, the sector will witness a healthy growth resulting in increased demand in the coming years.