RERA, garbage crisis force home sales in Mumbai region to drop 8%

Key Highlights

• The existing unsold inventory of 138652 unsold units remains a concern

• Ratio of the units launched in the price range of below Rs 75 lakhs increased significantly

• Smaller apartments and lower price boosts the share of launches in the central suburbs

Sales of residential properties in Mumbai Metropolitan Region )MMR) fell 8% between January to June 2017 period as new real estate launches dropped 36%. 

Knight Frank India, in its report said that the reason for this fall in new property launches in RERA compliance and garbage crisis in the city. The Bombay High Court has stayed permissions to new projects over saturation of dumping grounds in Mumbai. It also said, "RERA compliance also deterred builders from marketing their projects, thereby impacting residential sales."

Samantak Das, Chief Economist & National Director – Research said, “Launches have been hit more than sales. Developers are giving priority to completion of projects and becoming RERA compliant which eventually will augur extremely well for the industry. Sales at 8% lower than the same period last year have come out of the demonetisation impact."

"On the price front, Mumbai, like other cities, is undergoing a time correction. Going forward, since Maharashtra is one of the front runners in having a RERA regulator in place; we believe that this city may come out of the hiccups of policy interventions soon," he said. 

Knight Frank said that there currently is existing unsold inventory of 1,38,652 unsold units which remains a concern. "Analysis indicates that developers will take more than two years to exhaust the stock," it said.  

Developers push to offload unsold inventory triggers steady sales in the Kalyan-Dombivali belt – highest among other micro markets.